Cotton futures were up for four out of five trading sessions.

• Cotton prices continued higher for the fifth straight week, staying at the highest level since early October.
• Daily trading volumes were high due to speculative buying and index funds rolling.
• Trading ranges each day were relatively tight, but prices managed to gain ground.
• March futures settled at 89.10 cents per pound, up 261 points for the week.
• May open interest overtook March this week, becoming the lead contract.
• May futures settled at 89.68 cents per pound, up 204 points for the week.
• Total open interest reached its highest level since 2022, increasing 11,901 contracts to 265,444.

Major indexes set new highs throughout the week, despite hawkish Fed comments.

• U.S. added 353,000 jobs in January, the largest increase in a year and almost double of what was expected.
• Corporate earnings continue to be reported, many coming in higher than expected.
• Friday’s robust jobs report was backed up by lower-than-expected U.S. weekly initial unemployment claims.
• Fed officials have stated they are in no hurry to cut interest rates, heavily discounting the chances of a rate cut happening at the March FOMC meeting.
• Throughout 2023, the U.S. imported more goods from Mexico than China for the first time in over two decades.
• Crude prices jumped at the end of the week on news of increasing geopolitical tensions.

Demand for U.S. cotton remained steady for the week ending February 1.

• A net total of 284,100 Upland bales were sold for the week, keeping sales above average for this time of the year.
• New crop sales of 34,600 bales were reported.
• A total of 248,500 Upland bales were exported, below average for what we typically see at this time of the year.
• Shipment disruptions in the Red Sea have exporters worried about increased costs and delays.
• A net total of 9,500 Pima bales were sold and 11,900 bales were shipped for the week.

February WASDE Report Tightened up the U.S. Balance Sheet.

• The WASDE report provided overall bullish figures for the market to trade on.
• The U.S. export estimate was raised to 12.3 million bales, a necessary change to keep up with the sales pace.
• A decline in U.S. ending stocks tightened the stocks-to-use ratio to 19.93%, making this only the second time it was below 20% on the February report.
• The U.S. crop was unchanged at 12.43 million bales.
• World consumption increased to 112.46 million bales, a marginal increase of 30,000 bales.
• Global ending stocks decreased 680,000 bales to 83.70 million bales.

The Week Ahead

• The quantity of trading and new information that became available this week will likely continue into next week.
• USDA’s Annual Agricultural Outlook Forum will be held next Thursday and Friday. This will provide the only look at USDA’s expectations for the 2024/25 crop until the first balance sheet is posted in May.
• The National Cotton Council’s Annual Meeting will also take place next week. They will release their Economic Outlook and Planting Intentions for the 2024/25 crop on Sunday, February 18.