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ICE cotton futures end mixed after positive US exports data

26 Apr 2024 8:43 am
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Mumbai, 26 Apr (Commoditiescontrol): ICE cotton futures ended mixed on Thursday, after robust U.S. weekly export sales report undermined a sluggish sentiment in the broader financial markets and a strong U.S. dollar.

The U.S. dollar gained after the hotter-than-expected inflation reading for the first quarter, making cotton more expensive, especially for overseas buyers

ICE Cotton contracts for May closed at 79.58 cents, 7 points higher. Jul settled at 81.08 cents, adding 7 points. Dec ended 5 point weak at 77.64 cents.

Cotton complex was largely influenced by outside market forces such as crude oil and dollar.

The U.S. Department of Agriculture's (USDA) weekly export sales report showed net sales of 177,100 running bales for 2023/2024, up 21% from the previous week and 73% from the prior four-week average.EXP/COT

The report also showed exports of 261,700 running bales, down 2% from the previous week and 18% from the prior four-week average.

Weighing on sentiment, U.S. stocks slumped amid signs of persistent inflation that dampened hopes of the Federal Reserve easing monetary policy anytime soon.

On planting front, the US cotton crop is now 11% planted as of April 21 according to the NASS Crop Progress report from this afternoon. That matches both the 5-year average and last year’s pace. The largest state of Texas was on pace with normal at 16% complete, with Georgia 4% and 1% behind normal.

According to the World Agricultural Supply and Demand Estimates (WASDE) report on Thursday, world trade for 2023/24 was projected 700,000 bales higher this month to nearly 44 million.

USDA left the US cotton balance sheet alone this month, as they wait for final production data next month. Stocks are still at 2.5 million bales, though the US average farm price was trimmed by a penny to 76 cents. The World cotton S&D table was a 0.26 million bale cut to stocks at 83.08 million bales, mainly on tighter carryover from the previous crop year.

World trade for 2023/24 was projected 700,000 bales higher this month to nearly 44 million, as a 1.3-million-bale increase in China's imports was partially offset by reductions for Pakistan and Indonesia, as per the report.

Global ending stocks for 2023/24 were projected down nearly 300,000 bales in April as lower stocks across West Africa, Australia and Brazil more than offset higher supplies in China, the report added.

ICE certified cotton stocks were up another 1,170 bales on April 24 at 178,147 bales. The Cotlook A Index was back down 50 points to 88.25 cents/lb on April 24. The AWP dropped another 85 points to 61.33 in this afternoon’s release and is good through next Thursday.

Commitment of Traders data confirmed a mass exodus of the managed money long in cotton futures in options in the week that ended on April 16, of 25,890 contracts. That was the largest bear move in a one-week Tuesday/Tuesday move since CFTC started the data series back in 2006 taking the net long down to just 36,142 contracts.

For Friday, support for the Jul Cotton contract is at 80.62 cents and 80.16 cents, with resistance at 81.62 cents and 82.16 cents.

(By Commoditiescontrol Bureau: 09820130172)

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