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Cotton Marketing Planner

Cotton Marketing Planner

Dr. John Robinson

Department of Agricultural Economics, Texas A&M University

CTK24 Barchart Interactive Chart 03 22 2024 - Cotton Marketing Planner

Cotton Marketing Summary for the Week Ending Friday, March 22, 2024

ICE cotton futures peaked early and then slid into a lower, flatter pattern for the week ending March 22 (see chart above courtesy of Barchart.com).  The nearby May’24 contract settled on Friday at 91.53 cents per pound, while the new crop Dec’24 settled the week at 83.95.   Chinese cotton prices had a flat pattern across the week, while the A-Index of world prices was flat-to-lower.

In other ag futures markets, old crop CBOT corn, CBOT soybeans, and KC wheat all roughly followed sideways patterns with a mid-week upshift.  The U.S. dollar index trended higher, plunged, and then trended even more steeply higher this week.  Other macro influences (i.e., GDP, inflation, and interest rate policy) have mixed expectations for improvement.

Cotton-specific influences included modest U.S. export sales  (as of March 14) presumably as the demand response to recently gyrating prices.  Actual export shipments remain strong and 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 are bearish looking, e.g., continued rising certified stocks as an 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 was flat-to-lower across the week.  Coupled with this week’s mixed-to-lower pattern of price settlements, there was perhaps some modest long liquidation. Indeed, the regular Tuesday (March 12) snapshot of weekly speculative positioning showed 3,361 fewer (liquidated) hedge fund longs and a 743 decline in the index fund net long position, reinforced by 1,298 more (outright) hedge fund shorts, week over week.

For more details and data on Old Crop and New Crop fundamentals, plus other near term influences, follow these links.

Cotton Incorporated