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ICE cotton futures fall on long liquidation, strong dollar

17 Apr 2024 8:56 am
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Mumbai, 17 Apr (Commoditiescontrol): ICE cotton futures declined on Tuesday, pressured by long liquidation, while a stronger dollar and downbeat sentiment across related markets also pressured the natural fiber.

The dollar index rose about 0.1%, making cotton more expensive for overseas buyers.

ICE Cotton contracts for May closed at 81.29 cents, 164 points lower. Jul settled at 83.09 cents, losing 206 points. Dec ended 143 point weak at 79.14 cents. The closing bell in the cotton market had futures down 51 to 251 points. The outside market had little impact, as WTI crude oil was up 17 cents, with the US dollar index up 187 points.

The Cotton On-Call report from CFTC showed unfixed call sales at 10,572 contracts for May as of 4/5, a 4,198 drop from the week previous. For July, unfixed call sales are 22,995 contracts, with the total at 68,015 contracts.

Cotton planting across the US has now been reported at 8% complete according to NASS, even with the average pace in the last 5 years. That was also 1% ahead of last year. Cotton planting in the two major cotton growing states is off to a slightly slower start, with Texas at 13% complete and Georgia 1% planted, both 1% back of normal, despite the national level on par with average.

The U.S. Department of Agriculture's (USDA) weekly export sales report showed net sales of 81,500 running bales for 2023/2024, down 4% from the previous week, and 10% from the prior 4-week average.

According to the World Agricultural Supply and Demand Estimates (WASDE) report on Thursday, world trade for 2023/24 was projected 700,000 bales higher this month to nearly 44 million.

USDA left the US cotton balance sheet alone this month, as they wait for final production data next month. Stocks are still at 2.5 million bales, though the US average farm price was trimmed by a penny to 76 cents. The World cotton S&D table was a 0.26 million bale cut to stocks at 83.08 million bales, mainly on tighter carryover from the previous crop year.

World trade for 2023/24 was projected 700,000 bales higher this month to nearly 44 million, as a 1.3-million-bale increase in China's imports was partially offset by reductions for Pakistan and Indonesia, as per the report.

Global ending stocks for 2023/24 were projected down nearly 300,000 bales in April as lower stocks across West Africa, Australia and Brazil more than offset higher supplies in China, the report added.

The Cotlook A Index was down another 70 points to 88.90 cents/lb on April 15. The AWP dropped another 405 points to 65.43 last Thursday and is good through next week.

Cotton spec traders were shown 3,900 contracts less net long for the week after a bout of long liquidation. The CoT report had the group 80,600 contracts net long as of the settle. Commercial cotton traders were adding new hedges, though the shorts offset the new longs for a 4,000 contract swing to 127,600 contracts net short as of April 2.

For Wednesday, support for the Jul Cotton contract is at 81.16 cents and 79.23 cents, with resistance at 85.30 cents and 87.51 cents.

(By Commoditiescontrol Bureau: 09820130172)


       
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