MUMBAI, 25 Jan (Commoditiescontrol)The latest Commitments of Traders (COT) report for Cotton No. 2 futures on ICE highlights a significant shift in market sentiment, with Managed Money participants intensifying bearish positions. The net short position expanded to **48,439 contracts**, an increase of **5,353 contracts** (11.7% WoW), fueled by rising short interest and subdued long participation.
Key Highlights from the Report
Managed Money Trends: Long positions dipped to 36,383 contracts (-1.1% WoW), while short positions jumped to 84,822 contracts (+6.2% WoW). Spreading positions rose slightly to 40,760 contracts (+2.2% WoW).
Total Open Interest: Open interest climbed 5.7% WoW to 313,176 contracts, with Managed Money contributing 27.1% of short positions and 11.6% of long positions.
Trader Participation: Managed Money traders with short positions dropped slightly to 80, while long traders increased marginally to 49, indicating concentrated speculative bearish activity.
Market Sentiment
The rise in short positions and the expanding net short position underscore growing bearish sentiment in the cotton market. Uncertainty about tariffs on China has kept sentiment subdued, despite rising export sales on a week-on-week basis. Market participants appear cautious, reflecting expectations of further pressure on prices amid sluggish textile sector performance and ongoing macroeconomic uncertainties.
Implications for Cotton Prices
The bearish sentiment, coupled with rising open interest, points to heightened speculative activity and potential for further price declines. Traders are likely hedging against downside risks, aligning with weak fundamental indicators.
Outlook
Unless clarity emerges regarding trade policies and tariffs on China, and global demand strengthens, the market is expected to remain under bearish pressure.
(By Commoditiescontrol Bureau; +91 98201 30172)
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