The week ending Friday, July 15 saw ICE futures continue their downward slide, albeit with a bounce at week’s end (see chart above courtesy of Barchart.com).  Dec’22 settled up the limit on Friday at 88.71 cents per pound, while the more distant Dec’23 settled at 75.06.   Chinese cotton prices and the A-index were also lower this week.

Cotton-specific influences this week included tighter new crop U.S. cotton numbers, mixed rainfall (a lot more in the eastern cotton belt), but not enough in Texas to dent severe drought conditions, reinforced by record hot temperatures. The week saw a continuation of inactive physical trade,   seasonally weak old crop export sales, weaker new crop export sales, and sub-par export shipments.   U.S. squaring and boll setting progress was on par with recent history.

ICE cotton futures open interest increased across the week, in concert with lower price settlements suggested new short positioning (outright spec selling).  Indeed, the regular Tuesday snapshot of speculative positioning (through July 12) showed more selling with 4,267 fewer (liquidated) hedge fund longs, reinforced by 4,155 new outright hedge fund shorts, week over week.  That was roughly the same amount of liquidation and outright shorting as in the previous week.   The index fund long position was barely changed compared to last week.

CBOT new crop corn and soybean futures, as well as KC wheat futures all followed a similar down-then-leveling pattern across the week.  The historic climb in the U.S. dollar index appeared to peak/pause this week.

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.