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ICE Cotton Futures Rebound Ahead of Holiday Weekend

18 Jan 2025 10:10 am
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Mumbai, 18 Jan (Commoditiescontrol): ICE cotton futures climbed on Friday, driven by short covering and repositioning ahead of the long holiday weekend and Donald Trump's presidential inauguration.

The March cotton contract gained 0.87 cents to close at 67.60 cents per pound, while May and July contracts settled at 68.63 cents and 69.62 cents per pound, respectively.

Despite the rebound, external pressures weighed on the market, with the U.S. dollar index surging by 438 points and crude oil prices slipping by $0.64 per barrel. Traders cited uncertainty over Trump’s potential policies and their implications for the cotton market as a key factor influencing Friday’s trading activity.

Optimism was supported by the latest USDA export sales report, which showed upland cotton export sales reaching a marketing-year high of 224,800 running bales (RB), a 17% increase from the previous week. However, sales to China remained subdued at just 25,000 RB, indicating weaker demand. Net sales for the 2024/2025 marketing year jumped to 316,200 RB, up 71% from the four-week average.

Meanwhile, the USDA’s recent World Agricultural Supply and Demand Estimates (WASDE) report delivered a cautious outlook for the cotton market. U.S. cotton production estimates were raised by 159,000 bales to nearly 14.4 million for the 2024/2025 season, while ending stocks grew by 400,000 bales to 4.8 million due to lower demand projections. Global production estimates also increased by 2 million bales to 119.45 million, driven by higher output in China, with global ending stocks climbing to 77.91 million bales.

In the export market, U.S. forecasts were trimmed by 300,000 bales to 11 million, reflecting stiff competition from Brazil, Australia, and India. Additionally, CFTC data revealed speculators expanded their net short positions by 3,744 contracts, totaling 43,086 contracts as of January 14.

Technically, the March cotton contract remains below key moving averages, signaling potential market weakness. Analysts identified support levels at 66.95 and 66.30 cents, with resistance at 67.94 and 68.28 cents.

The U.S. markets will remain closed on Monday for Martin Luther King Jr. Day, with normal trading set to resume on Tuesday. As traders evaluate global uncertainties, including demand trends and geopolitical factors, cotton prices are likely to remain volatile in the short term.

(By Commoditiescontrol Bureau: 09820130172)


       
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