Response of U.S. Cotton Export Sales to ICE Cotton Futures Price (Scroll Down for More Discussion)

Discussion
The red line shows daily settlement of nearby ICE cotton futures, in cents per pound.  The blue peaks and valleys reflect weekly net export sales for the 2023/24 marketing year, in thousands of running bales. The graph generally shows the expected demand response to fluctuating futures prices for the 2024 crop.  Generally, as U.S. prices weaken, export sales (“quantity demanded”) fluctuate higher.  We saw that expected pattern in late February and early March.  But for the week since mid-March, and specifically for the week ending June 12, net sales of U.S. cotton for export remained weak.  The absolute levels were still modest considering how cheap U.S. cotton is priced.  However, I would interpret unspectacular weekly export sales differently depending on the season.  In the middle of the marketing year, I see it as an indicator of weak demand.  Where we are now at the end of the old crop marketing year, unspectacular export sales is more of a supply issue, i.e. there isn’t much old crop cotton around left to sell.  In contrast, net sales of upland for the next marketing year were strong at 274,900 bales, so new crop demand may be improving, subject to confirmation by repeated strong weekly sales.