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ICE cotton rebounds on speculative buying, weaker dollar

16 May 2024 8:39 am
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Mumbai, 16 May (Commoditiescontrol): Cotton futures on the Intercontinental Exchange (ICE) rebounded on Wednesday, helped by speculative buying after the contract dipped over 3% in the previous session, while a pull back in the dollar also lent support.

July cotton contracts saw a significant rise, closing 78 points up at 75.41 cents per lb. October contracts also rose, increasing by 31 points to settle at 75.27 cents, while March contracts ended the day 15 points strong at 75.85 cents.

The cotton market posted strength across most contracts on Wednesday, with futures up 8 to 78 points across most contracts. The outside market factors were helpful, with crude oil up 79 cents and the US dollar index down 732 points.

From a cultivation perspective, the latest Crop Progress report noted that cotton planting in Texas is on par with the average at 28% complete, and Georgia is progressing well, 3% ahead of the average at 35%. However, forecasts predict a slowdown in planting across a broad area of the Southeast, including eastern portions of the Texas panhandle due to expected precipitation.

Export Sales data will be released on Thursday morning, with the trade looking to see if the cheaper prices attract more business on top of the 253,700 RB reported last week.

Recent trade dynamics showed a robust demand for U.S. cotton, with USDA's latest weekly export sales report indicating net sales of 253,700 running bales for the 2023/2024 season. Despite this, China’s agriculture ministry anticipates an annual decline in imports of key commodities including cotton for the upcoming 2024/25 crop year.

Globally, the USDA’s World Agricultural Outlook Board (WAOB) adjusted its carryout estimates for the 23/24 cotton season downwards by 2.6 million bales to 80.48 million, citing a smaller carry-in. However, it projected an increase in the 24/25 ending stocks by 2.53 million bales to 83.01 million.

ICE certified cotton stocks were back up 4,470 bales on May 14 at 169,735 bales. The Cotlook A Index was 65 points higher on May 14 at 85.85 cents/lb. The AWP dropped another 91 points to 59.64 last Thursday and is good through tomorrow.

As traders and analysts monitor these developments closely, technical support for the July cotton contract for Thursday is anticipated at 74.09 and 72.77 cents, with resistance levels expected at 76.32 and 77.23 cents.

(By Commoditiescontrol Bureau: 09820130172)


       
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