COTTON MARKET WEEKLY FEBRUARY 2, 2024

March futures continued their ascent.

• After a slight dip to begin the week, cotton prices finished at their highest level since early October.
• Cotton made marginal gains despite the mixed data/news and general pressure on most of the commodity basket.
• Robust export sales/shipments and strong technical signals caused prices to spike on Thursday.
• March futures settled at 86.49 cents per pound, up 73 points for the week.
• Total open interest increased 16,790 contracts to 253,543.

Fed rate cuts will not happen until the target rate is attainable.

• Major stock indexes seesawed this week. Record highs were followed by a pullback after the FOMC decision, but they managed to recoup the losses by Thursday.
• Short-term interest rates will stick between 5.25% and 5.5% until the Fed has greater confidence that the target rate of 2% is attainable. The next Fed meeting is in May.
• Data shows an increase in consumer confidence and an increase in job openings.
• Crude oil traded on both sides of the market on heavy geopolitical tensions and mixed economic news.

 Robust export sales and shipments for the week ending January 25.

• The U.S. Export Sales Report was arguably the strongest report of the year thus far.
• 349,400 Upland bales were sold for the week, making it the fourth-highest week of sales.
• Sales for the next marketing year were healthy, with a net total of 25,200 bales reported.
• The most robust feature was shipments of 396,700 Upland bales, a high for the year.
• 13,500 Pima bales were sold, and 11,200 bales were shipped for the week.

The Week Ahead

• The World Agricultural Supply and Demand Estimates (WASDE) Report will be released next Thursday, February 8 at 11:00 a.m. CST.
• March options expire next Friday, February 9
• The largest of the Index funds will begin to roll their positions forward next week.