Posted : June 10, 2023

Market Movement from 17th Apr 2023 to 22nd Apr 2023.

  • May New York Cotton future showed a decline from 82.86 cents on 14-Apr to 78.41 cents on 21-Apr, resulting in a week-on-week loss of 4.45 cents.
  • The cotton market had a volatile week with sharp movements based on technical factors, weather reports, and economic news. Market was up on Monday and Tuesday, with traders reversing their positions and short-covering, as well as positive economic data from China. However, on Wednesday and Thursday, the market experienced significant losses due to negative export-sales and renewed fears of recession. West Texas weather reports showed no rain in the forecast for the next five days, with below-normal precipitation predicted for the 6 to 10 day outlook and above-normal chances for the 8 to 14 day model. The U.S. dollar also fluctuated based on economic news, with fears of an interest rate hike in May impacting the markets.
  • The U.S. export sales of cotton for the 2022-2023 season were reported at a total of 87,300 bales. This includes net upland sales of 62,100 bales and net Pima sales of 25,200 bales. Upland shipments for the week were reported at 2,89,800 bales, while Pima shipments were reported at 16,800 bales. Looking ahead to the 2023-2024 season, net upland sales for the week were reported at 38,000 bales. No net Pima sales were reported for this season. The total sales for the week were 38,000 bales.
  • The Cotton Association of India (CAI) has released its monthly estimate for the cotton crop for the 2022-23 season, reducing it by 10 lakh bales to 303 lakh bales of 170 kgs each. The estimated total cotton supply for October 2022 to March 2023 is 229.02 lakh bales of 170 kgs each, while cotton consumption for the same period is estimated to be 149 lakh bales of 170 kgs each. The export shipments for the same period are estimated to be 10.50 lakh bales of 170 kgs. each, with the end of March 2023 estimated cotton stock at 69.52 lakh bales of 170 kgs. each. The total cotton supply till the end of the cotton season, i.e., September 30, 2023, is estimated to be 349.89 lakh bales of 170 kgs. each, with the domestic consumption estimated to be 311 lakh bales of 170 kgs. each. The exports for the season have been estimated at 25.00 lakh bales of 170 kgs. each, 5 lakh bales lower than previously estimated.
  • At the beginning of the week, there was a bullish sentiment in India due to lower crop production. As a result, ginners started to go long and the rates touched nearly 63,500 Rs a candy. However, towards the end of the week, there was a sharp fall in prices following  the decline in NY future prices, causing the rates to come down to 62,500.
  • The daily arrival of cotton in India has improved, with around 1,40,000 bales being received daily. Consequently, farmers are now willing to sell their produce. However, the demand for yarn is not supporting the market, and the sudden increase in Indian basis is in contrast to the sharp decline in NY future prices.
  • Overall, the Indian cotton market has been unable to break out of its range, with NY future prices remaining at the lower end of the price band. There is hope for a better arrival of cotton in the next week.
  • This week, the USD-INR exchange rate experienced a modest level of variability, with rates ranging between 81.97 and 82.22 over the course of the week.

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