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ICE cotton prices rise on bargain hunting after reaching 18-month low

17 May 2024 8:37 am
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Mumbai, 17 May (Commoditiescontrol): Cotton futures on the Intercontinental Exchange (ICE) rose on Thursday as investors capitalized on recent price drops, focusing on planting progress and weather conditions in key growing areas. July cotton contracts surged by 83 points to close at 76.24 cents per lb, December contracts increased by 90 points to 75.19 cents, and March contracts climbed 95 points to 76.80 cents.

External market factors were mixed, with crude oil up by 71 cents and the U.S. dollar index rising by 193 points.

The U.S. Department of Agriculture (USDA) reported net sales of 156,500 running bales (RB) for the 2023/2024 season, down 38% from the previous week and 7% below the prior four-week average. Exports were at 238,800 RB, a 4% decrease from the previous week and steady with the prior four-week average.

The latest Crop Progress report showed that cotton planting in Texas is 28% complete, aligning with the average, while Georgia is ahead at 35%, 3% above the average. However, planting is expected to slow across the Southeast, including eastern Texas, due to forecasted precipitation.

Traders are awaiting the next export sales data release, looking for signs that lower prices may boost demand, building on the 253,700 RB reported last week. The USDA's latest export sales report indicated strong demand for U.S. cotton, despite China's agriculture ministry predicting a decline in cotton imports for the 2024/25 crop year.

Globally, the USDA’s World Agricultural Outlook Board (WAOB) reduced its carryout estimates for the 2023/24 cotton season by 2.6 million bales to 80.48 million, due to a smaller carry-in. However, it projected an increase in 2024/25 ending stocks by 2.53 million bales to 83.01 million.

ICE certified cotton stocks increased by 13,135 bales to 182,870 bales on May 15. The Seam reported 647 bales sold on May 15 at an average price of 68.01 cents per lb. The Cotlook A Index dropped 165 points to 84.20 cents per lb on May 15, and the Adjusted World Price (AWP) fell by 18 points to 59.46 cents per lb, effective through next week.

Traders and analysts expect technical support for the July cotton contract on Friday at 75.23 and 74.21 cents, with resistance levels at 77.25 and 78.25 cents.

(By Commoditiescontrol Bureau: 09820130172)

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