For the week ending Friday, October 13, the ICE Dec’23 futures contract flew in for a touch-and-go that bottomed around 85 cents and  launched back over 86, to finally settle Friday at 86.06 cents per pound (see chart above courtesy of Barchart.com).  Chinese cotton prices and the the A-Index of world cotton prices both declined across the week.

CBOT corn and soybean futures, as well as KC wheat futures, stair-stepped up and (mostly) down before rocketing up following Thursday’s WASDE report.  The U.S. dollar index followed a similar path to the grains, ending with Friday’s weekly highs. Other macro influences (i.e., GDP, inflation, and interest rate policy) remain a potential headwind to longer term cotton demand.  One example of that this week was the apparent risk-off reaction of many commodities and stocks in response to the Arab-Israeli conflict.

Cotton-specific influences included expected tightening by USDA of the U.S. cotton balance sheet in their October WASDE report. Continued scattered showers from southeastern Texas across to the Carolinas represents a shifting influence on the 2023 crop (i.e., from good to neutral to bad).  The latest Texas regional summaries highlight the effects of rainfall over the last several weeks  (click here and scroll past the feature article).

U.S. export sales through October 5 continued the relatively weak pattern since August. Actual export shipments were below the needed weekly average pace, but this is seasonally normal.  USDA’s weekly summary of the U.S. regional markets continued to reflect mixed spot physical trading activity and very light to moderate demand, across the U.S. regions.  Several other standard predictors of U.S. cotton demand are not encouraging, e.g., rising certified stocks and historically low levels of on-call sales.

ICE cotton futures open interest rose and fell in a mixed pattern this week.  Through Tuesday, October 10, the regular snapshot of speculative positioning showed short positioning with 1,879 fewer hedge fund longs, combined with 2,324 added hedge fund shorts, week over week.  In addition, the net long index fund position decreased by 1,386 compared to the previous Tuesday.

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.