The week ending Friday, July 29 saw ICE futures slowly but steadily climb a hill to the weekly highs (see chart above courtesy of Barchart.com). The Dec’22 contract settled at 96.74 cents per pound on Friday, while the Dec’23 settled at 82.44 cents per pound.  Chinese cotton prices were mixed while the A-index mostly rose this week.

Cotton-specific influences this week included rain over Arizona as well as across the northern and southern fringes of the eastern cotton belt).  Texas still languishes under drought conditions, reinforced by continued hot/dry weather.  Hot and dry is ok in South Texas as it proceeds to harvest, but it is taking a toll on the surviving cotton yield potential in the northern tier of the State.  The week saw a continuation of very light-to-moderate demand in inactive-to-slow physical trading,  seasonally weak (actually negative) old crop export sales, modest new crop export sales, and sub-par export shipments.   U.S. squaring and boll setting progress were at or above the average pace, respectively.  On the other side of the world, the Indian monsoon continued to bring excess rains to several important west-central cotton growing states.

ICE cotton futures open interest rose modestly but steadily across the week.  Combined with higher price settlements, this pattern suggests modestly increasing long positioning.  However, the regular Tuesday snapshot of speculative positioning (through July 26) showed more selling with 257 fewer (liquidated) hedge fund longs, reinforced by 797 new outright hedge fund shorts, week over week.  That is the fourth straight week of long liquidation and outright shorting by the managed money — at least through Tuesday.   The index fund net long position, however, did got larger, increasing by 906 contracts compared to last week.  So not a lot of speculative influence, based on the change in weekly numbers.

CBOT new crop corn and soybean futures, as well as KC wheat futures, all trended higher across the week. The U.S. dollar index continued it’s slide from recent 20-year highs.

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.