Mumbai, 24 Jun (Commoditiescontrol): The cotton market experienced notable fluctuations this week, influenced by various external factors and market activities. The cotton market during the week ending June 21, saw significant spreading, leading to increased liquidation pressure. Due to the shortened trading week, there was no Commitment of Traders (CFTC) data available, but market trends suggest a likely decline in short positions, a pattern seen over the past couple of weeks.
ICE cotton futures extended their decline on Friday, pressured by a stronger dollar and negative sentiment in broader financial markets. The July ICE cotton futures contract dropped by 266 points, closing at 68.19 cents per pound. The December contract fell by 41 points to 72.21 cents, and the March contract decreased by 36 points, settling at 73.60 cents. The sharp drop in the July contract was attributed to the start of the delivery intimation notice.
External factors exacerbated the situation, with crude oil prices falling by 64 cents and the U.S. dollar index rising by 253 points. The December contract notably hit its lowest level since November 2020, reaching 70 cents in the previous session.
Last week, July futures saw a decline of 287 points, while December futures dropped by 75 points. Deferred contracts experienced smaller declines, ranging from 8 to 34 points. The recent descent into the 70-cent range prompted a price limit reduction to 3 cents per pound.
Export sales data showed an uptick in old crop cotton bookings, reaching 189,016 RB for the week ending June 13, a three-week high. China purchased 82,200 RB, and Vietnam bought 38,600 RB. New crop sales slipped to 111,799 RB, with Guatemala leading at 24,600 RB and Turkey purchasing 15,400 RB. Export shipments totaled 197,905 RB, marking a four-week high and a 6.03% increase from the previous week. Unshipped sales remain substantial at 3.25 million RB with just seven weeks left in the marketing year.According to the National Agricultural Statistics Service (NASS), cotton condition ratings fell by 2% to 54% good/excellent, with significant drops in Alabama, Arizona, Mississippi, and Texas, although Georgia saw a slight improvement.
The USDA's World Agricultural Supply and Demand Estimates (WASDE) report reduced U.S. export projections by 500,000 bales to 11.8 million, increasing old crop stocks to 2.85 million bales and new crop ending stocks to 4.1 million bales. Global carryout for 2023/24 increased by 490,000 bales to 80.97 million, with new crop projections up by 489,000 bales to 83.49 million.
The cotton market faced significant pressure this week due to a stronger dollar and broader negative market sentiment. While export sales showed some strength, the overall market outlook remains cautious with potential fluctuations driven by external economic conditions and crop reports. Traders are closely monitoring support levels and market indicators for future movements.
(By Commoditiescontrol Bureau: 09820130172)
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