Mumbai, 25 Nov (Commoditiescontrol): Cotton futures witnessed a recovery last week, driven by technical buybacks following the December contract's expiration. Friday marked the unveiling of delivery intentions, adding momentum to the rebound. The March cotton contract gained 0.34 cents, closing at 70.77 cents per pound, while May and July contracts settled at 71.89 cents and 73.00 cents, respectively. For the week, the December was up 485 points and March up 186 points.
The broader market sentiment also improved, with crude oil futures rising by $1.09 per barrel and the U.S. dollar index reaching a two-year high. Analysts attributed the upward movement in cotton to technical corrections and robust demand data. The USDA’s bi-weekly Cotton Ginnings report indicated 2.157 million running bales (RB) of cotton ginned from November 1 to November 15, pushing the marketing year total to 6.852 million RB—20% higher than the previous year. Additionally, 77% of the U.S. cotton crop had been harvested by November 17, outpacing the average schedule by 5%.
Export data also supported market optimism. Weekly export sales reached a marketing year high of 318,516 RB during the week ending November 14, with shipments improving to 148,215 RB, the third-largest weekly total this year. Total commitments for upland cotton now stand at 6.364 million RB, though this represents only 60% of the USDA's export forecast, compared to the typical 68% at this stage.
Despite these positive indicators, bearish pressures linger. The USDA reduced production estimates to 14.19 million bales and export projections by 200,000 bales to 11.3 million due to weaker demand. Consequently, ending stocks were revised upward to 4.3 million bales. Managed money speculators also expanded their net short positions by 22,136 contracts, reaching a total of 35,987 contracts as of November 19.
Online trading activity remained moderate, with The Seam reporting sales of 12,433 bales at an average price of 69.57 cents per pound on November 21. Meanwhile, the Cotlook A Index gained 100 points to 80.70 cents per pound, while the USDA Adjusted World Price fell by 229 points to 55.91 cents per pound.
Looking ahead, traders expect volatility as the First Notice Day for the March contract approaches. Support levels are identified at 69.95 and 69.12 cents, while resistance may emerge at 71.36 and 71.94 cents. The market’s trajectory will likely depend on global trade dynamics, policy developments, and sustained export demand. As the year draws to a close, these factors could pave the way for a more sustained recovery in cotton prices.
(By Commoditiescontrol Bureau: 09820130172)
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