Mumbai, 14 May (Commoditiescontrol): ICE Cotton futures ended the week to May 12th on a dismal note with frontline contract July delivery down 4.02% or 3.37 cents, as cotton planting progress in the US and comfortable inventories weighed on prices.
ICE Cotton contracts for July 2023 finished at 80.53 cents, up 0.91 cent and December 2023 ended at 80.15 cents, 0.55 cent higher. Estimated volume was 29,096 contracts.
For the month, July was off 0.27 cent and thus far for the year it is down 2.85 cents.
The key factor that has played on negatively was the U.S. cotton planting progress. As per the weekly Crop Progress report, US cotton planting progressing to 22% planted as of May 7, was marginally 1% behind the 23% average pace.
The demand-supply update, export sales data from the USDA have also influenced cotton prices this week.
The global ending stocks remained above 92 million, which is bearish for the markets. The initial balance sheet for the new crop has ending stocks for July 31, 2024, at 3.3 million bales.
Export Sales data tallied bookings at a 6-week high of 246,817 RB of upland old crop in the week that ended on May 4. Weekly Shipments backed off from last week’s MY high but were still decent at 330,020 running bales (RB).
Cotton export sales commitments are now 15% smaller than a year ago. Compared to the USDA projection, they are still on pace, at 105% of USDA’s new 12.6 million bale WASDE forecast.
The 5-year average pace would be 109% of that projection. The FSA raised the Adjusted World Price for cotton by 128 points on Thursday, to 67.97 cents/lb. The monthly WASDE update from USDA showed cotton production for the old crop finalized at 14.47 million bales. That, along with a 400,000 bale increase to exports cut the carryout by 600,000 bales to 3.5 million bales.
The NASS Cotton Ginnings data showed 14.116 million bales were ginned for the season through March. That is down from 17.1m bales last year.
The Cotlook A Index was down by 225 points to 93.45 cents for 5/10. The AWP for cotton was raised 128 points to 67.97 cents.
At the weather front, the one- to five-day forecast continues to show amounts of up to 4 inches for certain areas of Texas. The extended six- to 10- and the eight- to 14-day outlooks carry above-normal chances for rain.
Friday’s Commitment of Traders update tallied managed money spec funds cutting 8,046 contracts to their cotton net short in the week ending May 9, taking it to -13,842 contracts.
For Monday, support for the July Cotton contract is at 79.50 cents and 78.47 cents, with resistance at 81.66 cents and 82.79 cents.
(By Commoditiescontrol Bureau: 09820130172)
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