ICE cotton futures again settled mostly lower during the week ending April 19 (see chart above courtesy of Barchart.com). The most active Jul’24 contract settled Friday up 41 points at 81.02 cents per pound. The new crop Dec’24 settled the week at 77.55 cents per pound. Chinese cotton prices were flat-to-lower across the week, as was the A-Index of world prices.
In other ag futures markets, old crop CBOT corn took a steady down-trend, while soybean futures followed a gyrating down-trend across the week. KC wheat futures declined early then traded flat. The U.S. dollar index traded in a sideways, gyrating pattern, reportedly influenced by Middle East tensions. Other macro influences (i.e., GDP, inflation, and interest rate policy) yielded mixed expectations for improvement.
Cotton-specific influences this week included stronger U.S. export sales reported (as of April 11). Actual export shipments remain just above the level needed weekly average pace. USDA’s weekly summary of the U.S. regional markets reflected inactive/slow trading of physical cotton trading activity and light to moderate demand, across the U.S. regions. Several other standard predictors of U.S. cotton demand remain bearish looking, e.g., continued rising certified stocks (perhaps the merchants’ alternative to mill apathy in the wake of the large old/new crop inversion), as well as historically low levels of on-call sales.
ICE cotton futures open interest continued to decline in the week ending April 18. In association with this week’s declining price settlements, this continues the appearance of long liquidation. Indeed, the regular Tuesday (April 16) snapshot of weekly speculative positioning showed a huge 24,024 fewer (liquidated) hedge fund longs, only slightly reduced by a 1,565 increase in the index fund net long position, week over week. The hedge fund short level was barely changed from the previous 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.