Mumbai, 15 Jun (Commoditiescontrol): ICE cotton futures closed with mixed results on Friday as traders balanced positive export data from the U.S. Department of Agriculture (USDA) against the strengthening U.S. dollar, which deterred international buyers. The July ICE cotton futures contract fell by 38 points, settling at 70.97 cents per pound. In contrast, the December contract rose by 35 points to 72.14 cents, and the March contract added 12 points, reaching 73.43 cents. Over the week, July futures dropped by 287 points, while December futures slipped by 75 points. Deferred contracts experienced smaller declines, ranging from 8 to 34 points.
The recent dip into the 70-cent range has triggered a price limit reduction to 3 cents per pound, with cotton futures hitting a 19-month low earlier in the week. The U.S. Dollar Index saw a significant rise of 318 points during the session, and crude oil prices fell by 7 cents per barrel. The Federal Open Market Committee (FOMC) maintained interest rates, indicating only one potential rate cut in 2024.
USDA export data revealed sales of 186,600 running bales (RB), a 19% increase from the previous week, though 3% below the four-week average. China, the leading consumer, accounted for 73,400 RB. Net sales for the 2023/2024 marketing year increased by 28% from the previous week, despite being 2% lower than the prior four-week average.
However, weaker-than-expected shipments exerted additional pressure on cotton prices. The USDA's World Agricultural Supply and Demand Estimates (WASDE) report showed a reduction of 500,000 bales in U.S. export projections, now at 11.8 million bales. This adjustment increased old crop stocks by 450,000 bales to 2.85 million, and new crop ending stocks rose by 400,000 bales to 4.1 million due to increased carryover.
Globally, the 2023/24 carryout rose by 490,000 bales to 80.97 million, while new crop projections increased by 489,000 bales to 83.49 million bales, reflecting higher beginning stocks and production but lower trade and consumption. ICE certified cotton stocks continued to build, reaching 138,247 bales on June 11.
The Cotlook A Index fell by 85 points on June 13 to 81.85 cents per pound, and the USDA Average World Price (AWP) decreased by 81 points to 57.32 cents per pound, effective through next Thursday.
China's agriculture ministry raised its cotton import forecast for the 2023/24 crop year by 200,000 metric tons. Traders are monitoring technical support levels for the December contract at 71.59 and 71.04 cents, with resistance at 72.65 and 73.16 cents. The CFTC data showed managed money spec funds at their largest net short position in nearly five years, totaling 35,735 contracts, an increase of 11,827 contracts for the week ending June 11.
(By Commoditiescontrol Bureau: 09820130172)
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