Market Movement from 06th Mar 2023 to 11th Mar 2023.
Cotton prices experienced a sharp decline in the last week, with NY May futures dropping from 84.17 on 3rd March to 78.18 on 10th March, resulting in a significant week-on-week loss of 5.99 cents.
The cotton market saw fluctuations in prices throughout the week of 6th March to 10th March, 2023. On Monday, the market was up due to a weaker U.S. dollar and a stronger Dow, with traders anticipating that Fed Chair Powell would be mildly hawkish in his congressional testimony. On Tuesday, Powell's comments about rising interest rates caused the U.S. dollar to strengthen, leading to bearish sentiment in the cotton market. Wednesday saw the market decline further as the U.S. dollar continued to rise, and the March WASDE report showed unchanged domestic numbers. On Thursday, cotton traded both sides of unchanged after export sales were lower than the previous week. The market's fluctuations were influenced by Powell's testimony, the strength of the U.S. dollar, and export sales data.
The USDA's WASDE report for March 2023 shows no changes in the 2022/23 U.S. cotton supply and demand forecast, with the projected marketing year average price received by producers remaining at 83 cents per pound. However, the global 2022-23 cotton supply and demand forecast includes lower consumption and trade, and higher production and stocks. World cotton consumption is 5,55,000 bales lower with reductions in Turkey, Pakistan, Indonesia, and Bangladesh. While production is up by over 7,00,000 bales due to larger expected crops in China, Australia, and Uzbekistan. The 2022-23 world ending stocks are projected to be 2.1 million bales higher than the previous month and 5.0 million bales higher than in 2021-22.
The latest cotton export weekly report showed U.S. Export Sales data for the 2022-2023 season, with net upland sales of 1,14,600 bales and net Pima sales of 3,800 bales. However, looking ahead to the 2023-2024 season, net upland sales were reported to be -68,300 bales, with no reported net Pima sales. This suggests that the cotton market may face challenges in the coming season. As always, staying informed of market trends and developments will be crucial for investors and industry participants.
Gujcot spot rate experienced a downward trend throughout the week, dropping from 62,450 on Monday to 61,000 on Saturday.
Indian arrival are increasing with farmers now understand the situation. All India arrival continued beyond 1,50,000 bales.
Consumption also better but daily surplus is putting pressure on prices.
Yet Indian raw cotton export is limited so cotton price has to move near spinners’ viability.
Indian spinners are getting export and domestic orders and running mills well.
Fridays limit down close of NY May future brings Indian basis very costly.
The USD-INR exchange rate remained relatively stable this week, with a range between 81.96 and 82.04. The Indian rupee has been holding steady against the US dollar due to the overall positive outlook for the Indian economy.
Indian farmers holding huge quantity of kapas but international cotton prices not supporting.
In next week Indian cotton may see more pressure on price.
Hope for better next week.
GUJCOT WEEKLY REPORT 25-MAR-2023
Market Movement from 20th Mar 2023 to 25th Mar 2023.
• NY May prices experienced a weekly loss