Mumbai, 15 APR (Commoditiescontrol): ICE Cotton futures settled the week ended April 14th lower, not far from an over four-month low of 76.3 cents on March 24th, on expectations of higher supply. Higher global cotton supply amid large ending-stock has impacted cotton's future price curve.
On Friday, ICE cotton prices moved sideways as outside influences prevented natural fibre from making serious up moves. Also, the strength of US dollar kept a lead on buying activity. Further, the May cotton futures expiry restricted trade participation. On Thursday, the complex witnessed an increase in volume from roll over and liquidation activity as well.
ICE Cotton contracts for May 2023 finished at 82.86 cents, down 0.49 cent, July settled at 82.93 cents, down 0.26 cent and December 2023 ended at 82.80 cents, 0.08 cent lower. Estimated volume was 52,396 contracts.
As of Friday's settlement, May cotton is down 0.34 cent on the week, up 0.08 cent on the month and down 0.59 cent for the year.
The cotton market was largely influenced by outside in the past week. The Dow was triple-digit lower, while gold melted some $48 down, as the financial markets feeling the concerns of another rate hike by the Federal Reserve. As of Friday, there is an 85% consensus that the central bank will do that at its May meeting.
Monday’s Crop Progress report showed 6% of the US cotton crop planted as of April 9, behind the 7% average pace.
Retail sales for March fell by 1% the Commerce Department reported Friday. Fears of rising interest rates, bank failures and an imminent recession are causing the U.S. consumer to obviously rein in their spending.
USDA’s FAS reported 143,203 RBs of cotton sales for the week that ended April 6. Cotton exports were 334,569 RBs for the week the accumulated export reached 7.146m RBs, still 4% lower than last year’s pace. Total commitments were at 11.76m RBs, down 18% on year. Compared to the USDA projection, they are still on pace, at 102% of USDA’s upwardly revised April WASDE forecast.
In its latest April WASDE report, the U.S. Department of Agriculture forecast the world production to rise by 829,000 bales compared with March, as a 1-million-bale increase in China more than offset a weaker Brazilian crop. World 2022/23 ending stocks are projected to be 867,000 bales higher, with the largest rise in India, where stocks are set to rise 450,000 on lower exports. Meanwhile, the 2022/23 global consumption is estimated to grow by 65,000 bales this month as a 500,000-bale increase in China outweighed declines in Bangladesh and Turkey.
The Seam reported 15,072 bales of cotton were sold on April 12 at an average gross price of 81.05 cents. That was the largest daily sale since Jan 26th and the highest average selling price since March 3rd. USDA’s FSA raised the adjusted world price for cotton by 17 points to 70.05 cents/lb. ICE certified stocks were 1,485 bales as of April 12.
The Cotlook A Index was 25 points higher to 96.40. USDA’s FSA raised the adjusted world price for cotton by 17 points to 70.05 cents/lb. ICE certified stocks were 1,485 bales as of April 12.
Friday afternoon’s Commitment of Traders report showed managed money spec firms trimming their net short in cotton by 2,501 contracts in the week ending April 11, taking it to -14,773 contracts.
US dollar's strength as well as crude oil prices movement will determine cotton prices going forward, while focus will be moving towards FOMC meet next month.
For Monday, support for the July Cotton contract is at 82.50 cents and 82.06 cents, with resistance at 83.51 cents and 84.08 cents.
(By Commoditiescontrol Bureau: 09820130172)
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