Mumbai, 26 Jun (Commoditiescontrol): ICE cotton futures extended gains on Tuesday, reaching over a three-week high due to short covering and anticipation of the U.S. Department of Agriculture (USDA) acreage report expected later this week.
The July ICE cotton futures contract rose by 131 points, closing at 72.60 cents per pound. The December contract gained 168 points to 75.07 cents, and the March contract added 159 points, settling at 76.42 cents. This rise was largely driven by short covering amid forecasts of dry weather conditions across Texas and other southeastern regions. However, external factors such as a decline in crude oil prices by 89 cents per barrel and a rise in the US dollar index by 164 points were negative influences on the market.
Despite unfavorable weather conditions for cotton, the positive impact of earlier conditions still supports output hopes. The weekly National Agricultural Statistics Service (NASS) Crop Progress report indicated an overall crop condition rating increase of 1% to 56% good/excellent. However, the Brugler500 index dropped 4 points to 342 due to more very poor ratings. State-specific ratings showed Texas down 4 points to 324, and Georgia down 2 points to 353.
Friday's USDA Acreage report will be a significant event for traders. Estimates suggest an average increase of 156,000 acres from the March Intentions report, bringing the total to 10.829 million acres, with a range of 10.5 to 11.2 million acres.
As of June 24, ICE certified cotton stocks decreased by 27,597 bales to 100,381 bales. There were 28,363 decerts, 766 new certs, and no bales awaiting review. The Cotlook A Index dropped 50 points to 82.20 cents per pound on June 24, and the USDA Average World Price (AWP) fell 67 points to 56.65 cents per pound last Thursday, remaining valid through this week.
Cotton speculators increased their net short position by 8,194 contracts to 51,442 in the week ending June 18.
The USDA's World Agricultural Supply and Demand Estimates (WASDE) report cut U.S. export projections by 500,000 bales to 11.8 million, raising old crop stocks to 2.85 million bales and new crop ending stocks to 4.1 million bales. The global carryout for 2023/24 increased by 490,000 bales to 80.97 million, with new crop projections rising by 489,000 bales to 83.49 million.
Traders are monitoring technical support levels for the December Cotton contract at 73.59 and 72.10 cents, with resistance at 75.87 and 76.66 cents. The focus this week is on the USDA's annual acreage report, set to be released at noon EDT (1600 GMT) on Friday, June 28.
(By Commoditiescontrol Bureau: 09820130172)
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