Cotton Market Fundamentals & Price Outlook
RECENT PRICE MOVEMENT
Most benchmark prices decreased over the past month. Chinese prices moved sharply lower.
• Open interest has shifted from July and into the December contract. After moving lower in early May, values for the July contract were volatile but range-bound between 65 and 70 cents/lb for most of the past month. Values for the December contract also moved lower in early May. While they had been range-bound, December prices have been testing the lower end of their recent range, briefly dropping below 65 cents/lb in the latest trading.
• The A Index fell in early May, but has been more stable in recent weeks, holding to levels between 76 to 81 cents/lb.
• The China Cotton Index (CC Index 3128B) posted its sharpest declines in nearly five years. In international terms, values decreased from 104 to 92 cents/lb (-12%). In domestic terms, values fell from 15,600 to 14,000 RMB/ton (-10%).
• Indian cotton prices (Shankar-6 quality) were stable, generally holding to values near 83 cents/lb in international terms and near 45,000 INR/candy in domestic terms.
• Pakistani prices fell from 76 to 71 cents/lb in international terms but were stable in domestic terms (near 8,800 PKR/maund). The decrease expressed in USD was a result of the PKR falling about 5% against the dollar since early May.
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