Mumbai, 02 Dec (Commoditiescontrol): ICE cotton futures advanced for the second consecutive week, buoyed by strong export sales, a weaker U.S. dollar, and rebalancing activity ahead of the month’s end.
The benchmark March cotton contract gained 116 points over the week, settling at 71.93 cents per pound on Friday. Contracts for May and July closed higher at 72.98 cents and 73.93 cents, respectively.
For November, the March contract posted a modest 10-point rise, reflecting the broader resilience in the cotton market despite headwinds from global competition and revised U.S. production estimates.
The U.S. Department of Agriculture’s (USDA) weekly export sales report highlighted a marketing-year high of 324,100 running bales (RB) of upland cotton sold for the 2024/25 marketing year. This marked a 2% week-over-week increase and a 46% surge compared to the four-week average. Pakistan and Vietnam were the largest buyers, accounting for a combined 61% of total sales. However, shipments dipped slightly to 130,318 RB, though they remained 46.68% higher than the corresponding period last year.
Meanwhile, the USDA’s Cotton Ginnings report revealed significant progress, with 2.157 million RB processed between November 1 and 15, bringing the season’s total to 6.852 million RB, 20% higher year-over-year. Harvesting across U.S. cotton fields reached 84% completion, surpassing the five-year average of 80%.
Despite strong export sales, the USDA lowered its cotton production forecast to 14.19 million bales, reflecting reduced crop prospects. Exports were also trimmed by 200,000 bales to 11.3 million, while ending stocks rose to 4.3 million bales. These adjustments indicate potential supply pressures amid subdued global demand.
Brazil’s growing dominance as the world’s leading cotton exporter continues to challenge U.S. exports. Brazilian farmers have been shifting from corn to cotton planting, intensifying competition in global markets.
Market indicators were mixed last week. The Cotlook A Index remained steady at 82.00 cents per pound, while The Seam reported online sales at an average price of 68.65 cents per pound. ICE-certified stocks were unchanged at 13,274 bales, and the USDA’s Adjusted World Price rose to 57.53 cents per pound.
In the coming weeks, traders expect potential volatility, with March contract support levels at 71.37 and 70.81 cents and resistance at 72.32 and 72.71 cents. Key drivers will include sustained export demand, shifts in global trade policies, and U.S. market dynamics. With production forecasts revised downward and competition from Brazil intensifying, the market may face challenges in maintaining its upward momentum.
(By Commoditiescontrol Bureau: 09820130172)
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