For the week ending Friday, September 13, the most active Dec’24 cotton futures started off flat then steadily marched three cents higher, capped by a post-WASDE bump over 70.50 cents per pounds. Friday saw a weakening back to Thursday’s pre-report levels (see chart above courtesy of Barchart.com). Friday’s settlement was 69.82 cents per pound, down 56 points on the day. In contrast, Chinese cotton prices and the A-Index crept lower this week before partially recovering at week’s end.
In other markets, CBOT corn and soybeans, as well as KC wheat futures all traded in a flat, sideways pattern that trended higher after recovering from Thursday post-WASDE report volatility. U.S. dollar index followed a flat-to-higher path before sliding Thursday and bottoming on Friday. Other macro influences (i.e., GDP, inflation, and interest rate policy) continued to reflect mixed/changing expectations.
Cotton-specific influences this week included moderately bullish supply/demand adjustments from USDA as well as tolerable well U.S. export sales. The pace of 2024/25 export shipments remained below the needed weekly average pace to reach USDA’s target level of exports, though this is not unusual for this supply-dominated time of the year. In terms of weather, this week saw unhelpful showers over the eastern Cotton Belt, particularly from Hurricane Francine over the Mid-South. And on the other side of the world, the Indian monsoon rains are forecast to continue above average, which typically contributes to higher Indian/world production.
ICE cotton futures open interest eroded this week while futures price settlements were modestly higher. This gives the appearance of short covering. Inexplicably, as of Tuesday September 10 (released Friday September 13) the weekly snapshot of speculative positioning greater speculative short positioning, week over week, with included 707 fewer hedge fund longs and 5,901 more hedge fund shorts. The index fund net long position changed by only +268 contracts, week over week.
For more details and data on Old Crop and New Crop fundamentals, plus other near term influences, follow these links (or the drop-down menus above) to those sub-pages.
Source: TAMU