Cotton futures fell sharply during the holiday-shortened trade week but managed to recoup most of the losses.

• The May contract reached a life-of-contract high on Friday after a busy week of trading.
• March futures were active as traders were clearing up or rolling positions forward leading up to the contract’s First Notice Day on Friday.
• China returned to the marketplace this week, but the anticipated buying proved to be disappointing.
• May futures settled at 94.46 cents per pound, down 85 points for the week.
• Total open interest increased 3,833 contracts from the previous week, totaling 265,714 contracts.

The National Cotton Council’s Planting Intentions Survey estimated that the U.S. will plant 9.85 million acres.

• The NCC survey was taken from mid-December through mid-January, and cotton prices have recently moved in favor of cotton.
• As of right now, it appears that more people agree with the 11 million acres that USDA set as the initial baseline.

The Dow Jones and S&P 500 posted new highs on the end-of-week rally in the stock market.

• Nvidia’s sales in the fourth quarter tripled from last year, setting a record for the most significant one-day market capitalization gain and helped rally markets across the globe.
• The minutes from the January FOMC meeting indicated that the Fed is in no rush to begin rate cuts.
• U.S. weekly initial unemployment claims fell to a five-week low, showing a continually solid labor market.
• U.S. Producer Price Index (PPI) increased more than anticipated in January, rising 0.9% year-over-year and 0.3% month-over-month.

U.S. export sales slowed for the week ending February 23.

• Although the headline number is lower than usual this time of year, U.S. export sales are still above the pace needed to reach the current export estimate.
• A net total of 130,500 Upland bales were booked for the 2023/24 crop year.
• The biggest buyer of Upland cotton was Bangladesh, seeing as much of this reporting period was during China’s holiday.
• A total of 255,500 Upland bales were exported, slightly below the pace needed to reach export expectations.
• A net total of 3,400 Pima bales were sold, and 3,100 bales were shipped for the week.
• New crop sales of 58,100 Upland bales are around average for this time of year.

The Week Ahead

• Soil moisture maps, long-term weather reports, and planting estimates will garner more attention now that USDA and NCC have released their 2024/25 projections.
• The next official planting estimate will be USDA’s Prospective Plantings report, which will be released on March 28, 2024.
• As we advance, U.S. export sales and forward crop prices will be critical data points for fundamental traders.