Mumbai, 7 Sep (Commoditiescontrol): ICE cotton futures fell to their lowest in over two weeks on Friday, pressured by weak sentiment in the equities, oil, and grains markets. Speculators also adopted a bearish outlook ahead of the upcoming harvests, adding to the downward trend.
The December cotton contract dropped by 1.56 cents, settling at 67.88 cents per pound, while the March and May contracts declined to 69.69 cents and 71.02 cents per pound, respectively. The December contract posted its second consecutive weekly loss, down 3% for the week.
Investor sentiment remained fragile as Wall Street’s main indexes slid following a jobs report that failed to clarify the Federal Reserve’s interest rate strategy for later this month. Additionally, the dollar index rose by 71 points, and crude oil futures fell by $1.04 per barrel, adding to the pressure on cotton prices.
Traders noted that cotton prices have dipped below the $0.70 mark as the market awaits more macroeconomic data. Demand concerns, particularly from China, continue to weigh on prices.
In August, the December contract managed to gain 1.5%, breaking a four-month losing streak, partly due to weather-related concerns. Emerging tropical systems in the Atlantic, with one nearing the Caribbean, raised fears of potential supply disruptions.
Traders are also closely monitoring the upcoming U.S. federal weekly export sales report. The latest USDA crop progress report showed that 44% of the U.S. cotton crop was rated good-to-excellent, up from 40% the previous week, with improvements in Texas and a slight decline in Georgia.
On the trade front, the USDA reported strong export sales, with Pakistan and India as major buyers. However, U.S. cotton exports have reached only 38% of the USDA's annual forecast, lagging behind the typical pace.
The Seam reported online cash sales of just 1,475 bales at an average price of 65.41 cents on Thursday. ICE cotton stocks were unchanged on September 5, leaving 265 bales of cert stocks. The Cotlook A Index was back down 65 points on September 5 at 81.05 cents/lb. The USDA Adjusted World Price (AWP) was raised by 29 points from the week prior on Thursday to 57.27 cents/lb.
Despite reduced production estimates, cotton traders remain cautious, keeping an eye on support and resistance levels for the December contracts placed at 67.26/66.65 cents and 69.03/70.19 cents per pound, respectively amid ongoing weather, demand, and geopolitical uncertainties.
(By Commoditiescontrol Bureau: 09820130172)
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