Mumbai, 16 Oct (Commoditiescontrol): Cotton prices continue to consolidate as the natural fiber faced selling pressure at every rise. However, the complex received strong support from the latest USDA report that fanned supply concerns, especially from the U.S.
On Friday, ICE cotton futures ended higher as poor crop conditions in key U.S. growing regions sparked supply worries. ICE Cotton contracts for December ended at 86.06 cents, up 114 cents. March closed at 87.77 cents, 111 cents higher. May settled at 88.88 cents, adding 125 cents. The December contract was still at a net 108 point loss or 1.24% lower for the week. December futures have kept within 80-90 cents since mid-July.
The market witnessed a delayed reaction to the WASDE report which was quite friendly in both U.S and world ending stocks, traders said.
The weekly Crop Progress report indicated 25% of the cotton crop was harvested by last Sunday, 1% above the average pace. Condition ratings were up 2 at 32% gd/ex, as the Brugler500 was up 7 points to 275.
On Thursday, the USDA in its October World Agricultural Supply and Demand Estimates (WASDE) report cut U.S. production in 2023/24 to 12.8 million bales, citing lower yields in Texas. It also said Brazil's cotton production in 2023/24 will exceed that of the United States for the first time, and that the South American country is close to surpassing U.S. cotton exports for the first time since the 19th century.
Daily classings data had 59,647 bales of upland cotton classed, with no update for pima. The week’s classings were 337,228 bales for a season total of 1.364m bales. Last year’s pace was 1.69m bales as of Oct 14.
USDA reported 43,399 RBs of cotton was sold for export during the week that ended Oct 5. That was a 7-wk low. Cotton exports were 104,000 RBs for a MYTD total of 1.61 million. That trails last year’s pace by 27%.
A reduction to the export production lessened the ending stocks impact, but carryout was down 200,000 bales to 2.8 million.
The weekly Cotton Market Review showed 4,380 bales were sold at spot this week for an average price of 81.22 cents. YTD sales were listed at 101,000 bales, from 31,000 last season. The Cotlook A Index was 95.85 cents/lb on Oct 11, down by 140 points. USDA lowered the AWP for cotton by 130 points to 71.06.
Elsewhere, Ivory Coast exported 178,541 tonnes of cotton from January to August, down 45% from the same period last year, provisional port data showed.
Meanwhile analysts said, U.S. cotton prices are unlikely to gain much traction this year despite lesser output as trade tensions push key buyer China to rivals Brazil and Australia.
Oil prices extended losses for a third session, dragged down by a larger-than-expected crude and gasoline stockbuild in the United States. Lower prices make the cotton substitute, polyester, cheaper.
CFTC data released on Friday showed managed money cut 6,613 contracts from their net long position during the week that that ended October 10. The net selling trimmed that net long position as of Tuesday to 42,470 contracts.
Cotton complex seems to have entered consolidation phase. Much of the future trend would depend on the crop progress and economic activity amid linger Fed rate hike fears. Another element added recently added was the escalation of violence in the middle east. Israel-Hamas hostility will added pressure on financial markets, which could mean more volatility in the near term.
For Monday, support for the December Cotton contract is at 85.03 cents and 84.00 cents, with resistance at 86.79 cents and 87.52 cents.
(By Commoditiescontrol Bureau: 09820130172)
0 Comments 
Post Comment 
