Cotton Market Summary as of Friday, June 14, 2024

For the week ending  June 14, the most active Dec’24 cotton futures contract gyrated in a sideways pattern that zero’d in on the lower 72 cent level (see chart above courtesy of Barchart.com). The Dec’24 contract settled at 72.14 cents per pound on Friday, up 35 points on the day.  Chinese cotton prices were mixed-to-lower across the week, as was the A-Index of world prices.

In other ag futures markets, CBOT corn and soybean futures both were flat-to-lower before shifting into an up-trend to finish the week.  KC wheat trended lower across the entire week. The U.S. dollar index first was flat, then fell off a cliff, then recovered into a strong uptrend to end the week.  Other macro influences (i.e., GDP, inflation, and interest rate policy) continued to reflect mixed expectations for the general economy.

Cotton-specific influences this week included minor and un-surprising adjustments to old and new crop balance sheets by USDA. Weather radar showed scattered rainfall over parts of Texas as well as Kansas and Missouri. Speaking of rains, the unfolding Indian monsoon rain pattern is late appears delayed in reaching the important west central cotton growing states.  There were decent weekly U.S. export sales reported this week (through June 6).  Actual export shipments were under the needed weekly average pace to reach USDA’s target level of exports. USDA’s weekly summary of the U.S. regional markets reflected inactive/slow trading of physical cotton trading activity and light to moderate demand, across the U.S. regions.  Several other standard predictors of U.S. cotton demand are either bearish (low levels of on-call sales) or in a state of flux (rebounding certified stocks).

ICE cotton futures open interest followed a mixed-to-lower pattern across the week ending June 13.  In conjunction with this week’s price weakness, it has the appearance of long liquidation, but not consistently across the week.  The most recent weekly (Tuesday June 11) snapshot of speculative positioning showed an increase in short positioning, but not from long liquidation.  Rather, the hedge fund long position was barely changed week over week (+366 contracts).  However, the hedge fund shorts showed a net increase of 11,251 hedge fund shorts, compared to the previous week.  The Index Fund net long position increased by 5,913 contracts week over week, reflecting speculative long positioning.  So the week was a mixed bag.

For more details and data on Old Crop and New Crop fundamentals, plus other near term influences, follow these links (or the drop-down menus above) to those sub-pages.

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