ICE Cotton Sees Modest Recovery Amidst Demand Uncertainty
- Details
- Published: Thursday, 09 May 2024 16:33
The ICE cotton market has witnessed a slight uptick driven by technical buying, signaling a tentative recovery amidst ongoing uncertainty regarding demand dynamics. Traders remain vigilant, eagerly awaiting key reports and updates to gain clearer insights into both demand and supply factors shaping the market landscape.
As market participants grapple with fluctuating conditions, all eyes are on the forthcoming World Agricultural Supply and Demand Estimates (WASDE) and US cotton export sales reports. These reports are anticipated to provide crucial data regarding the current state of demand and supply, offering valuable guidance to traders navigating market uncertainties.
Recent trading activity indicates a modest uptrend, with the US cotton July contract settling 44 points higher at 77.50 cents per pound, while the December contract closed at 75.75 cents, marking an increase of 44 points. Despite the strengthening of the dollar index, which renders cotton more expensive for foreign buyers, the market found support from a recovery in crude oil prices, contributing to the positive momentum in cotton prices.
Market liquidity remains evident, with trading volume slightly up at 36,721 contracts on Tuesday, indicating sustained market activity. Moreover, open interest has experienced a notable increase, suggesting the entry of new speculative shorts and trade longs into the market. Total open interest stood at 210,242 contracts, up 2,066 contracts from the previous day, reflecting continued interest and engagement among market participants.
Certified stocks began the day at 184,790 bales, down 1,320 bales, with no bales awaiting review, underscoring the prevailing market dynamics and inventory levels.
Looking ahead, market participants are eagerly anticipating the upcoming US cotton export sales report scheduled for Thursday, as well as the USDA WASDE report slated for release on Friday. Of particular interest is the inclusion of the first country details for the 2024-25 season in the WASDE report, offering critical insights into future supply projections. Additionally, the report will feature the final 2023-24 US Crop Production Report, providing further clarity on domestic production trends.
In Wednesday's trading session, ICE cotton July 2024 saw a marginal increase of 0.24 cent, reaching 77.74 cents per pound. Cash cotton traded at 73.25 cents (up 0.44 cent), May 2024 at 77.00 cents (up 0.44 cent), the October (new crop) contract at 76.65 cents (up 0.49 cent), the December 2024 contract at 76.00 cents (up 0.25 cent), and March 2025 at 77.50 cents per pound (up 0.24 cent).
Amidst evolving market conditions and anticipation surrounding key reports, the ICE cotton market remains dynamic, with traders poised to react to incoming data as they navigate the complexities of supply and demand dynamics in the cotton sector.