Through Friday, May 23, ICE cotton futures stair-stepped higher early, then finished the week in a sideways gyration (see chart above courtesy of Barchart.com). Jul’25 ICE cotton settled Friday at 66.11 cents per pound, while new crop Dec’25 settled the week at 68.63. Chinese cotton prices were mixed-to-higher this week, as was the A-Index of world cotton prices.
Grain and oilseed futures trended higher through Thursday and then weakened and/or leveled off. The U.S. dollar index gently descended in a touch-and-go pattern. Longer term, it is still an open question whether the U.S. Dollar Index is bottoming after stair-stepping lower all spring. It is also uncertain how financial markets will react as they approach the end of the 90 day hiatus on U.S. tariffs on its trading partners. Other macro influences (i.e., GDP, inflation, and interest rate policy) remained mixed in their expectation and implication.
Cotton-focused market influences this week included continued weekly reports of very light to moderate regional demand for U.S. cotton. The only active spot trading was in the West Texas-Kansas-Oklahoma region where there are moderate supplies left to trade. There were continued modest U.S. export net sales reports through May 15. The pace of 2024/25 export shipments continued above the weekly average level needed to reach USDA’s target level of exports (11.1 million bales). Almost all of the projected U.S. old crop production has been ginned and classed since April.
For the week ending May 22, the day-to-day shifts in ICE cotton open interest showed a slight rise and leveling off. Coupled with the rising price settlements through Tuesday, this suggests a little new long positioning early in the week. But actually, as of May 20, the regular weekly (Tuesday) snapshot of speculative open interest reflected short positioning in the form of 1,808 fewer (liquidated) hedge fund longs and 8,025 more hedge shorts, week over week. The index trader net long position was barely changed, week over week, expanding only 22 contracts.
The dynamics of ICE cotton futures may also represent a wet blanket on the market. It remains true that unfixed call sales (by mills) are at an historically low level, perhaps reflecting the cautionary buying on the demand side. In terms of ratios, unfixed call purchases (by suppliers) outweigh unfixed call sales by almost two-fold across all contracts, as of May 9.
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.
