• In October, NY December future gradually declined from 74 cents to 70 cents. Although there were attempts to rebound due to some positive news, these gains were not sustained.
Market Movement from 28th Oct 2024 to 02nd Nov 2024.
• NY Cotton futures for December closed at 70.66 cents per pound on October 25 and at 70.17 cents on November 1, reflecting a week-over-week loss of 0.49 cents.
The cotton market moved to the lower end of its long-term trading range this week, with inquiries for U.S. cotton increasing at these lower price levels. Harvest is progressing quickly across the country, although rain in the forecast may hinder momentum. How will next week’s presidential election, November Supply and Demand Estimates (WASDE) Report, and Federal Open Market Committee Meeting (FOMC) influence the market? Get QuickTake’s read on the week’s events in five minutes.
President's Message - Seven Years of Gujcot Trade Association
Dear Members and Friends,
I am delighted to share this message as we celebrate Seven years of the Gujcot Trade Association. This milestone is a testament to the dedication and hard work of our entire team, and it fills me with immense pride to see how far we've come.
Market Movement from 21st Oct 2024 to 26th Oct 2024.
• In the beginning of the week, the NY December contract saw an uptick, crossing the 72 cents/lbs level. However, as the week progressed, prices gradually declined. Geopolitical tensions and slower export demand contributed to this downward pressure, ultimately resulting in a weekly loss of 33 points for the NY December contract.
Cotton futures were up for the week, but a lack of news left the marketplace relatively quiet. U.S. export sales saw a slight uptick as a result of the recent decline in prices. With geopolitical tensions and the upcoming presidential election on the horizon, what impact might these factors have on markets? Get QuickTake’s read on the week’s events in five minutes.
Demand Issues Keep Driving Cotton’s Four Cent Trading Range
Cotton muddled through the week, spending most of its time near its heretofore support level at 71 cents. It appears that the market will try again to break that support and visit the very high 60s before making a run back to the 74-cent level. Thus, the narrow four cent trading range between 70.50 and 74.50 continues to be the most respected trading range.
Market Movement from 14th Oct 2024 to 19th Oct 2024.
• The NY future market traded in the range of 70-72 cents/lb. Export shipments remained low, and sluggish demand kept pressure on the market throughout the week. Future prices dropped close to 70 cents but managed to close the week at 70.99 cents/lb, reflecting a weekly loss of 122 points.
Cotton futures declined this week, trading at the lower end of the recent range due to weak demand and the pressures of a stronger U.S. dollar. U.S. export sales increased for the week, but shipments remained below average, continuing concerns about the current market environment. With the cotton harvest underway, what does the future hold for demand? Get QuickTake’s read on the week’s events in five minutes.
USDA’s October supply demand report was the one that analysts knew would solve the bullish/bearish price dilemma that has faced the market for the past five months. They all thought it would, including me. Collectively, we knew better.
Market Movement from 07th Oct 2024 to 12th Oct 2024.
• NY December, trading remained within a narrow range throughout the week. Low export sales indicated sluggish demand. In the October WASDE report, the USDA cut U.S. cotton production by 3,00,000 bales, but this was offset by lower exports and reduced mill use. Overall, the WASDE report was neutral, with only minor changes compared to the September report. As a result, December futures closed the week with a loss of 106 points.
Cotton futures remained rangebound for the week, but the October WASDE report was a bearish surprise to the market. As traders absorb these changes, all eyes are now on harvest progress and global supply dynamics. Was the USDA accurate in its production estimates, or could further adjustments be on the horizon? Get QuickTake’s read on the week’s events in five minutes.
Compared to last month, the U.S. cotton balance sheet for 2024/25 shows lower production, mill use, and exports. NASS reduced the estimate of U.S. all-cotton production by slightly over 300,000 bales to 14.2 million in its October Crop Production report, primarily reflecting the damage from Hurricane Helene.
Market Movement from 30th Sep 2024 to 05th Oct 2024.
• NY Dec futures moved from 72.72 cents/lbs on 27-Sep to 73.27 cents/lbs on 04-Oct, recording a W/W gain of 0.55 cents.
• In the latest U. S. Export Sales Report for the week ending 26-Sep-2024, U.S. export sales of cotton showed modest activity. Net Upland sales for the 2024-2025 marketing year reached 95,900 bales, while Upland shipments were higher at 1,07,100 bales.
Despite Hurricane Helene, Cotton Prices Locked in Low 70 Cent Range
Wow! Christmas and the holiday season are fast approaching. Make your plans to give the gift of cotton this Christmas.
We keep trying to push the market higher, but economic conditions continue to fight that effort. Despite that, the market did spend most of its time trading at the upper end of the price range established back in June. Thus, the bulls cannot really complain, despite not getting any momentum from the hurricane.
The cotton market continued to face challenges from ongoing crop uncertainty and a significant port strike that raised concerns about potential supply chain disruptions. With Hurricane Helene’s damage estimates ranging from 300,000 to 700,000 bales and overall crop quality on the decline, the market is poised for the upcoming WASDE report. What implications will these developments have for cotton prices? Get QuickTake’s read on the week’s events in five minutes.
Market Movement from 23rd Sep 2024 to 28th Sep 2024.
• NY December cotton futures have shown a stable to slightly downward trend, reflecting slower demand due to lower export sales. On September 20th, NY December cotton futures closed at 73.52 cents, but declined to 72.72 cents by September 27th, marking a week-over-week loss of 0.80 cents.
Conventional wisdom has it that there is something we do not understand when the market gives us a bullish report and there is no positive price reaction. Retracing last week’s first sentence, USDA has given the market three consecutive bullish reports. Yet, the net market reaction has been, in effect, a flat market.
The cotton market faced new production concerns as Hurricane Helene approached Georgia. Disappointing export sales highlight ongoing demand weakness while the threat of supply chain disruptions looms. How will these developments shape the market in the weeks ahead? Get QuickTake’s read on the week’s events in five minutes.
Market Movement from 16th Sep 2024 to 21st Sep 2024.
• This week began with a limit-up move on Monday, driven by the Federal Reserve's announcement of its first interest rate cut, which triggered some short covering. The following two days saw declines, but on Thursday, a combination of a 50 basis point rate cut by the Fed and improved export sales led to a rebound. Ultimately, the week ended on a bullish note, with the NY December contract closing with a solid gain of 370 points week over week.
Bulls Pushing for Cotton Rally, But Bears Continue to Lurk
Some say just two, but USDA has now given the market three consecutive bullish supply demand reports. Both world and U.S. stocks have come down to very manageable levels. New York is some six cents off its lows and has now ventured into the expected 72-75 cent trading range.
Cotton prices surged to their highest level since July amidst a volatile trading week. This increase followed the Federal Reserve’s cut to interest rates for the first time in four years. Is this rally a turning point for cotton prices, or is it primarily influenced by technical factors that could easily reverse? Get QuickTake’s read on the week’s events in five minutes.
What should we think about a very bullish USDA supply demand report? One would have never guessed that the 1955 release of “Where Have All The Flowers Gone” would portend the demise of the long and honorable profession of growing cotton.
Market Movement from 09th Sep 2024 to 14th Sep 2024.
• The December futures for cotton surged significantly due to fears of an approaching hurricane, technical buying, and a bullish WASDE report. The primary factor was a reduction in U.S. production, which was cut to 14.5 million bales. As a result, the December futures closed with a gain of 194 points.
Is USDA underestimating September production in this month’s World Agricultural Supply and Demand Estimates (WASDE) report, or is it truly as low as it claims? Meanwhile, U.S. inflation hits a three-year low, shifting focus to next week’s Fed meeting. Get QuickTake’s read on the week’s events in five minutes.
The U.S. cotton balance sheet for 2024/25 shows lower production, exports, and ending stocks compared to last month. Beginning stocks and domestic use are unchanged. The September NASS forecast of U.S. production is 14.5 million bales, down about 600,000 bales from August, largely due to reduced yields for upland cotton in the Southwest. The allcotton yield forecast of 807 pounds per acre is 33 pounds lower than last month.
Cotton Prices Hold on Signs of a Better U. S. Crop
Just as the light appears at the end of the tunnel, we are run over by an oncoming train.
Cotton’s best export sales report in months was met with a triple digit selloff, a very bearish response to six weeks of positive fundamental news. It all points to the severe price damage that demand failure continues to heap on the market.
Market Movement from 02nd Sep 2024 to 07th Sep 2024.
• At the start of the week in early December, the market opened on a positive note, showing gains. However, in the last three days of this shortened week, there was a sharp decline, leading to a weekly loss of 211 points.
• The December New York cotton futures contract traded within a narrow range throughout the month, fluctuating between 67 and 71 cents. Although the USDA's WASDE report was somewhat bullish due to a 1.9 million bale reduction in U.S. production, sluggish demand and unfavorable macroeconomic conditions limited upward momentum. Ultimately, the December contract closed with a 100-point month-over-month gain.
Are the Texas rains too little, too late, or is there still hope for an upside surprise in the crop? Meanwhile, cotton and other markets wonder whether the Fed will stick the landing or push the economy into recession. Get QuickTake’s read on the week’s events in five minutes.
Cotton prices traded sideways during the holiday-shortened week.
The dog days of August are over, and cotton has climbed back to 70 cents. Cotton prices backed and filled all week with a couple of triple digit gain days with only limited pressure to push prices lower. Effectively the market kept the big gains made last week. The primary harvest month, December, settled at 69.99 cents – one point below the Friday open, but up seven points on Friday (Aug. 30) trading.
Market Movement from 26th Aug 2024 to 31st Aug 2024.
• The December cotton contract on the New York exchange experienced a volatile week, with several triple-digit swings both up and down. Losses were partly attributed to heavy rainfall in India and Pakistan, which provided some support for the market. However, overall demand remains weak, leading to a weekly decline of 92 points for the December contract.
Shifting weather forecasts and economic signals from the Fed have kept traders on their toes. Despite a turbulent week, cotton futures have shown resilience, offering a glimpse into what may lie ahead for the U.S. crop and global demand.
Cotton prices traded on both sides of the market this week but eventually settled slightly higher.
Market Movement from 19th Aug 2024 to 24th Aug 2024.
• After a long wait, this week brought some positive news for the bulls. A weaker dollar, poor crop conditions in Detroit, and some short covering helped pull the market back above 70 cents for the first time in a while. The NY December contract closed with a week-over-week gain of 367 points.
Over the past 3 months, prices (December futures) have made four consecutive lower lows – rallies followed by a subsequent decline to lower than where the market was before the rally.
Little Reason to be Bullish on Cotton, But Ample Reason to be Positive
Finally, cotton gets a plus 70 cent close. The 67-cent mark held. The tooth pulling and gashing of teeth is over, but probably another test of the high 60s is not. Likely prices will slip back below the 70s but only temporarily. There is nothing on the demand side. All the price momentum will come from continued issues with crop production. Thus, there is little reason to be bullish, but ample reason to feel positive.
The December contract closed higher for four out of five trading sessions this week.
• December futures gained 219 points, settling at 69.34 cents per pound.
• A weaker U.S. dollar and potential speculative short covering helped prices close above 70 cents per pound for the first time since late July. An unseasonably hot and dry forecast in Texas likely provided a slight boost to the market, which was noted in the decline of crop conditions. A weak Export Sales Report caused prices to move lower on Thursday.
Market Movement from 12th Aug 2024 to 17th Aug 2024.
• A sharp cut in U.S. production in the WASDE report gave a boost to the bulls as prices briefly crossed the 70-cent mark on Monday. However, weaker fundamentals soon erased those gains, and by the end of the week, NY December futures hovered around 67 cents per pound. The contract eventually closed with a loss of 110 points.
The cotton market’s 67-cent price resistance continues to be tested day after day.
While carryover stocks are declining, the world major exporters – Brazil and the U.S. – have more than sufficient crops to fill the import needs of major cotton consumption countries.
Bearish sentiment remains in the cotton market amidst a weak technical outlook.
• The December futures contract lost 9 points for the week ending August 15, settling at 67.15 cents per pound. On Wednesday, a new low settlement price of 67.05 was established.
The U.S. cotton estimates for 2024/25 show lower acreage, production, exports, and ending stocks compared to last month. Estimated domestic use is unchanged and beginning stocks are raised slightly. NASS’s first survey-based estimate of U.S. production is 15.1 million bales, down 1.9 million bales from last month’s WASDE forecast.
Market Movement from 05th Aug 2024 to 10th Aug 2024.
• In the first four days of the week, NY futures traded near 67 cents per lbs. Although the price dipped below 67 cents during intraday trading, there was strong support at that level. On the last day of the week, the market found some momentum, bolstered by good export numbers and short-covering at the support level.
Text of invited presentation for Southwest Georgia Farm Credit Here We Grow podcast, Episode 29, recorded Aug. 7, 2024
There’s no doubt and everyone knows that cotton prices have been disastrous. Back in March and April prior to planting, price was in the 83 to 84 cents area. By peak planting time in May, we were 75 to 76 cents. Now we’re at less than 70 cents, around 68 cents.
Cotton Market Fighting Off Bearish Push for Lower Prices
December cotton futures fought off the bears trying to push prices below the 67-cent support level all week. The market caught a bit of a positive tone on Friday (Aug.9), ending the week with a triple digit 110-point gain and settling at 68.34 cents. The attempt to push prices below the 67-cent price resistance level did see a new life of contract low on two different trading days.
December futures made a contract low, caving to outside market pressure and a weak technical outlook.
• The December contract fell 84 points, settling at 67.24 cents per pound.
• The cotton market followed an eroding macroeconomic environment early in the week, continuing the downtrend from recent months. Bearish sentiment remains regarding the current outlook, and trend followers appear negative.
Net Upland Sales 2024-25 Net sales reductions of Upland totaling 949,600 RB for 2024/2025 marketing year, which began August 1, resulted in increases primarily for
The 2023-24 cotton year is in the history books, and the big, unshipped export sales orders were moved into the 2024-25 marketing year. Will they get shipped or will they linger on the books just as they did during the prior year? Wow, 2025 is all but here.
Market Movement from 29th Jul 2024 to 03rd Aug 2024.
• NY December, the New York Cotton futures market showed an uptrend at the beginning of the week. However, in the latter part of the week, it gave up its gains and closed nearly unchanged, with a week-over-week gain of just 26 points.
• July began with ICE December cotton future trading in the low seventy-cent range. However, over the past two weeks, prices declined and broke the psychological support level of 68 cents. Despite this, the month's trading range remained between 68 and 74 cents. Factors contributing to this decline include lower-than-expected exports, a higher crop yield, and increased ending stocks in the U.S. Additionally, significant short positions held by speculators have driven the market downward.
Market Movement from 22nd Jul 2024 to 27th Jul 2024.
• Improved crop progress report indicates large crop in USA so speculators keep huge short position in NY December. With pressure of this selling force NY December breakout psychological support of 68 cents and close at 67.99 NY December closed loss of 271 points W/W.
Are Mills Providing a Glimmer of Hope as Market Pain Continues?
A glimmer of hope, and hopefully the beginning of what we promised. Yet, there will be several, several days of pulling teeth, some without Novocain. It is not going to be easy. Too, recall our caution that growers will have to wait at least until May 2025 becomes the nearby contract to price their 2024 production.
December futures sank to their lowest level in over two years.
• Price pressure came from all directions this week. A weak technical outlook, speculators retaining a near-record short position, declining outside markets, and talks of a bigger crop caused the significant sell-off. The near-term outlook is bearish, with the summer doldrums in full swing and current market conditions.
USDA’s July crop production and supply/demand estimates were bearish and cast a somewhat dimmer price outlook likely for the near term. Following is a summary of the major changes:
• Exports for the 2023 crop year were lowered 200,000 bales to 11.6 million bales. This is not unexpected given the poor pace of shipments recently.
USDA’s July world supply demand report, released the prior week, made for seesaw trading all week. Prices saw 100 points higher one day, only to slide 100 points the next as the December contract ended the week nearly unchanged.
Market Movement from 15th Jul 2024 to 20th Jul 2024.
• At the start of the week, there was some short covering by speculators, and the market crossed 72 cents. However, lower exports and dull buying pushed back all gains, leading to December future closing with a loss of 57 points week-over-week.
After trading back and forth throughout the week, cotton futures found support and made marginal gains.
• Last Friday’s WASDE put pressure on prices, but Monday saw a triple-digit rally in futures prices. Prices fluctuated throughout the week due to speculators continuing to cover short positions and potentially favorable rainfall in Texas.
These are the fun days in the cotton market. USDA released an extremely bearish world supply demand report for July. Thus, to ensure market participants kept focused, prices moved higher. Bearish fundamentals and higher prices were evidence that traders had completely faded the report. That is, the report was expected, and the changes had already been factored into prices.
Market Movement from 08th Jul 2024 to 13th Jul 2024.
• This week, lower US exports and shipments, along with a bearish to neutral WASDE report, put pressure on cotton prices. However, at the low seventy level, the rate did not seem attractive for short selling. As a result, the market ignored all bearish fundamentals and closed nearly unchanged, with a gain of 29 points week-over-week.
COTTON: The July U.S. cotton projections for 2024/25 show higher acreage, production, and beginning and ending stocks compared to last month. Projected domestic use and exports are unchanged. U.S. planted area is 1 million acres higher, as indicated in the June Acreage report, leading to a 1-million-bale increase in the crop projection to 17.0 million bales. Ending stocks are 1.2 million bales higher at 5.3 million, or 36 percent of use, primarily due to the larger projected crop.
Cotton Plantings Report Surprises Market, Potential for Better Prices Remains
Despite the very bearish USDA June plantings report, the potential for higher 2024 crop prices remains on track. Recall, we warned that higher prices would come very, very slowly and only bit by bit.
Gujcot Third Quarterly Rate Movement Report - 2023-24
• The April-June quarter was marked by significant volatility and a major downturn in the cotton market.
• NY Futures for May and July started near 93 cents, with April experiencing a continuous downtrend. In May, the front month was July, and prices remained in a narrow range of 77 to 85 cents. However, in June, the market crashed again, reaching the low 70s. By the end of June, December, as the front month, closed at 72.69 cents.
The cotton market consolidated lower in the holiday-shortened trade week.
• Last week’s unexpectedly bearish Acreage Report continued to weigh on the market. The December contract settled 222 points lower at 72.36 cents per pound.
Market Movement from 01st Jul 2024 to 06th Jul 2024.
• The future contract for cotton in New York closed lower again, indicating reduced demand due to lower export sales. Also, higher acreage report put bearish trend in market. The December contract closed with a loss of 171 points week-over-week.
Market Movement from 24th Jun 2024 to 29th Jun 2024.
• This week started on a bullish note, with short covering driving the market near the psychological number of 75 cents. However, poor export sales and higher planting numbers reversed the trend, bringing the market back to the 72 cents area. New York December closed with a smaller gain of 48 points week over week and loss of 242 points month over month.
Cotton futures were up modestly, finding support after trading on both sides of the market this week.
• December futures fell to their lowest level since October 2022 but recouped some losses by the end of the week. The contract traded 83 points higher, settling at 72.62 cents per pound.
The tiny cracks in the bears’ armor remain just that – tiny. Yet, they exist and absent an absolutely unexpected widespread excellent rain over some nearly two million acres of Texas cotton (primarily Districts 1-N and 1-S) over the next two weeks, those cracks will begin to widen. Certainly, much more moisture is needed over the vast dryland acreage of 1-S.
Market Movement from 17th Jun 2024 to 22nd Jun 2024.
• The front month December saw a recovery after an initial loss at the beginning of the week. Despite the early setback, December managed to cover all losses and closed unchanged, with 7 cents gain week-over-week. On expiry, NY July future experienced a significant loss, but this was largely ignored by the market as all positions were shifted to December future contract.
In India, a significant portion of the population relies on agriculture and agriculture-based businesses. Given the critical role that farmers play in the Indian economy and the food security of the nation, it is indeed the duty of the government to protect and support them. One of the key measures taken by the Government of India to protect farmers is the provision of a Minimum Support Price (MSP) for certain crops, especially Kharif crops.
Government of India has increased the Minimum Support Price of Medium Staple Cotton from 6,620 to 7,121 and Long Staple Cotton from 7,020 to 7,521 for season 2024-25.
Market Movement from 10th Jun 2024 to 15th Jun 2024.
• The New York July future closed with a week-over-week loss of 287 points, while December future contract closed with a loss of 75 points week-over-week. This resulted in an inversion is now carrying December 117 points relative to July.
There are tiny cracks appearing in the cotton bear’s armor. They are minute, well camouflaged, and may be difficult to penetrate, but finally they are there. Indications are that mills can finally see value in cotton with prices in the low to mid-70s. Demand will have to surface by the first quarter of 2025 to truly build a higher price base.
Cotton futures continued to slide on a looser balance sheet for June and rains in the Southwest.
• Since last week’s close, July futures gave up 409 points, settling at 71.35 cents per pound. The decline is primarily due to the contract’s liquidation as First Notice Day approaches.
COTTON: The 2024/25 U.S. cotton projections show higher beginning and ending stocks compared to last month. Projected production, domestic use and exports are unchanged. The 2024/25 season average upland farm price is down 4 cents from the May forecast to 70 cents per pound following a decline in new-crop cotton futures.
Market Movement from 03rd Jun 2024 to 08th Jun 2024.
• NY July continues to experience weekly losses due to bearish fundamentals. Improved crop progress and lower shipments have intensified the bearish sentiment. NY July closed with a 231 points weekly loss, while NY December closed with a 222 points weekly loss. The July-December inverse widened to 95 points.
Misery loves company and cotton had a lot of company this week. Yet, cotton trading should not have been that bad. The old crop July contract, trading with just over two weeks before first notice day, fell into the 73’s, while next year’s hope – the new crop December futures contract – fell into the 72’s. The 74-cent area appeared to be the holding station for July futures and still may be, but market/government fundamentals could push it lower.
Another Second Chance Price Rally Still Not Enough
Cotton will come around. But as we have repeatedly commented, the 2024 crop will have to be priced in 2025, most likely based on the May 2025 contract. It is just going to take that long before mills will approach 85% spinning capacity. Neither U.S. nor world carryover are burdensome. Thus, the inching upward of demand will pull prices along.
Nothing is worse than to have land, money, and other resources already committed to production and watching the market (and the value of expected production) decline. Farming is a biological process and takes time, and time creates risk. Resources must be committed months in advance of production and marketing.
Market Movement from 27th May 2024 to 01st Jun 2024.
• At the start of the week, NY futures showed a bullish trend and crossed 82 after a long period. However, the rally was short-lived. Rains in Texas and some macroeconomic factors caused prices to drop in the last two days of the week, resulting in the market closing with a significant loss. July futures experienced a week-over-week loss of 437 points, and December futures closed with a week-over-week loss of 290 points. The July-December inverse narrowed to just 104 points.
• At the start of the month, NY Futures traded within a narrow range. Mid-month, there was an upward movement from the 75 cents to 80 cents range. However, the middle of the month saw more bearish activity. In the last week, the price briefly crossed 82 cents but failed to sustain this level and subsequently fell back below the 80-cent range.
Market Movement from 20th May 2024 to 25th May 2024.
• After a long time, bulls have a reason to smile. Flooding in Brazil and crop losses in China have created positive sentiment and triggered short covering of speculators, leading to a good rally. New York July contracts closed with a week-over-week gain of 463 points, while December contracts gained 304 points week-over-week. As a result, the inverse spread between July and December widened to 251 points.
The market finally felt some relief after weeks of selling and finished higher in four consecutive trading sessions.
• July futures gained 548 points from last week’s close, settling at 81.72 cents per pound. The July contract closed up the limit on Wednesday and had another strong rally on Thursday.
Market Movement from 13th Apr 2024 to 18th May 2024.
• NY futures experienced another weekly loss, hitting the limit down on Tuesday but seeing some recovery on other days. Better expectations for the new crop, lower Chinese futures, and a bearish technical outlook contributed to the downward pressure on prices. Ultimately, NY July futures closed with a weekly loss of 142 points, while December futures closed with a loss of 16 points. The July-December inverse narrowed to just 92 points.
Cotton suffered another sloppy week as lower Chinese prices, coupled with bearish inflation numbers and very weak apparel sales, all worked to force prices lower – even limit down one day and near limit down trading on another.
Market Movement from 06th Apr 2024 to 11th May 2024.
• On Wednesday, the New York futures market saw a temporary surge, reaching a high of 80 cents. However, this upward momentum couldn't hold steady amidst prevailing bearish sentiments. Decent export sales, the release of bearish WASDE (World Agricultural Supply and Demand Estimates) reports only intensified the downward pressure on the market. As a result, the New York July futures ultimately closed with a weekly loss of 75 points, while the December future weekly loss was 84 points.
The cure for low prices has finally set in. The recovery will be slow and, just like recovery from many ailments, there will be good and bad days. Some setbacks can be expected along the way.
COTTON: The U.S. cotton projections for 2024/25 include a larger crop as planted area is slightly higher and abandonment is projected at less than half the rate realized in 2023/24. Production is forecast at 16.0 million bales, based on 10.67 million planted acres as indicated in the March Prospective Plantings report, with harvested area expected to rise 2.7 million acres year over year to 9.1 million. U.S. abandonment is projected below the 10-year average reflecting moisture conditions to date in the Southwest.
Prepare to Price 2024 Cotton Late in the Marketing Season
May 05, 2024
Fundamentals drove cotton prices down to the mid-70s before selling ran out of steam and a small bit of demand brought prices back to the high 70s for old crop and the mid-70s for new crop. July found its support at 77 cents but slipped lower before recapturing the 78-cent mark, settling the week at 78.06. Likewise, December searched out its support at the 74-cent mark and settled the week at 75.97.
Market Movement from 29th Apr 2024 to 04th May 2024.
• The week began with a glimmer of positivity on Monday, but the overall macroeconomic conditions, coupled with the Federal Reserve's decision to pause rate cuts, remained negative. Additionally, lower exports and shipments further fueled the downward trend in the market. By Thursday, the market had suffered a loss of nearly 500 points.
• During the past month, New York witnessed a surge of unsettling events, marked by a disturbing level of violence. Despite positive export figures and a neutral WASDE report, the market remained indifferent. The escalation of tensions between Iran and Israel, coupled with the certification of stock, exerted immense pressure on market dynamics.
Cotton Prices Trapped as Export Sales Continue with No Change in Demand
Low prices have encouraged export sales of all growths and U.S. cotton continues to move. Yet the level of sales is not sufficient to suggest that demand is improving. In fact, the level of sales does not even suggest any improvement in demand. Thus, cotton prices remain trapped within the narrow six cent, 77-83 cent trading range. The high 70s to low 80s trading range for both old crop and new crop will continue to prevail.
Market Movement from 22nd Apr 2024 to 27th Apr 2024.
• The week began with a correction mode, but ultimately surrendered all gains by the week's end. The market, oversold as it was, seemed to overlook positive export figures. In July, the market remained nearly unchanged, ending the week with a loss of 12 points.
July futures continued their descent, finishing higher in only one trading session this week.
• May First Notice Day is less than a week away, so traders are focused on the July contract. July futures settled at 80.61 cents per pound, finishing 464 points lower for the week.
Focus Shifts to Production as Cotton Prices Falter
Apr 19, 2024
The cotton market suffered through another week of mad cow disease as the new crop December contract fell to a low of 77.26 cents before recovering, settling the week at 77.55. The old crop May contract settled the week at 78.69 cents, but that contract delivery period begins next week.
Market Movement from 15th Apr 2024 to 20th Apr 2024.
• NY future is continuing its downward trend under the pressure of certified stock, exacerbated by escalating tensions between Iran and Israel, along with technical damage. Speculators are liquidating their long positions amidst these conditions.
No Sugar Coating: Bearish Tones Return to Cotton Market
Apr 14, 2024
Thoughts that cotton had been knocked out last week were premature, as the spot May contract and other prices across the board fell in unison – including the especially important new crop December contract.
Market Movement from 08th Apr 2024 to 13th Apr 2024.
• There is a noticeable trend in NY cotton future market: many speculators are liquidating their long positions, driven by fear of delivery. Over the past three weeks, there's been a free fall in the market. In NY future, July is the leading month now. The increase in volume coupled with the decrease in open interest indicates that speculators are indeed liquidating their long positions. The anticipated tensions between Iran and Israel are exacerbating the situation.
Cotton futures continued to fall during a busy, data-driven week.
• May futures settled at 83.37 cents per pound, finishing 377 points lower for the week.
• With May First Notice Day less than two weeks away, the July contract will start to take focus. July futures settled at 85.25 cents per pound, finishing 332 points lower for the week.
COTTON: The U.S. 2023/24 cotton supply and demand projections are unchanged this month, with ending stocks forecast at 2.5 million bales or 18 percent of total disappearance. The marketing year price received by upland cotton producers is projected to average 76 cents per pound, a decrease of 1 cent from last month.
Market Movement from 01st Apr 2024 to 06th Apr 2024.
• There was a bloodbath in the NY future, with increasing certified stocks experiencing a speculators liquidation. This long liquidation of spec positions converted continuing downward sentiment.
Gujcot Second Quarterly Rate Movement Report - 2023-24
• During the last quarter, in February, the New York May Futures experienced a notable upward surge, surpassing the dollar mark and closing above it. However, in March, there was a continuous downward correction trend observed in the NY May Futures until the end of the month. By the end of March, NY May closed in the range of 90 to 91.38 cents.
My best cotton friend in Lubbock says the market is going higher while my best buddy in Memphis says it’s going lower. Of course, I agree with my friends.
All cotton planted area for 2024 is estimated at 10.7 million acres, up 4 percent from last year. Upland area is estimated at 10.5 million acres, up 4 percent from 2023. American Pima area is estimated at 203,000 acres, up 38 percent from 2023.
Cotton futures finished lower for the week at 91.38 cents per pound but managed to recover some of the week’s losses after the release of Thursday’s Prospective Plantings report.
• May futures closed at 91.38 cents per pound, finishing 83 points lower for the week.
• News in the cotton market was relatively light this week, as traders were anticipating the Prospective Plantings report.
Market Movement from 18th Mar 2024 to 23rd Mar 2024.
• The future outlook suggests a further decline in May future due to certified stock weight. In the week ending May, there was a loss of 241 points, followed by a 174-point loss in July. Consequently, July now carries an inverse trend. However, there's a slight improvement in the new crop December, gaining 27 points week over week. As a result, the inverse has narrowed to 790 points with July futures.
COTTON: This month’s 2023/24 U.S. cotton forecasts show lower production and ending stocks relative to last month. Production is reduced 334,000 bales to 12.1 million, based on the March 8 Cotton Ginnings report. The final estimates for this season’s U.S. area, yield, and production will be published in the May 2024 Crop Production report. Ending stocks are 300,000 bales lower this month at 2.5 million.
• In the month of February, NY Future experienced a roller coaster ride, fueled by financial support and strategic acquisitions. Breaking through all psychological resistance barriers in the first week, it surged past the 90-point mark for the first time. By the end of first week, there were indications that NY Future might surpass the dollar threshold, reaching a high of 103.80 and closing near 99.57. Overall, NY May futures demonstrated a substantial gain of 13.16 points month-over-month.
• This month, the bulls in the New York Futures market were delighted by the favorable cotton balancesheet of the United States as presented in the WASDE (World Agricultural Supply and Demand Estimates). The market also received strong support from robust export sales, contributing to a positive sentiment among traders.
• Speculative interest in cotton saw a return, leading to a steady increase in open interest throughout the month.
Gujcot First Quarterly Rate Movement Report - 2023-24
• In the month of October, both NY December and March futures commenced trading near 88 cents, experiencing a gradual decline. The market remained relatively stable during December, with NY March operating within a narrow range of 79 to 82 cents. The downward trend during this period was primarily attributed to factors such as the Gaza war and the Federal Reserve's decisions to decrease interest rates.
Cotton prices for the week traded in a high-to-low range of only 190 points. Every attempt to move beyond eighty-two cents was quickly stifled by grower selling while downside support held firm at 80 cents before giving way slightly on Friday closing at 79.83. This was disheartening when at the same time the Dow, S&P 500, and NASDAQ were hitting all-time highs.
• November was typically dominated by bears, characterized by sluggish trading throughout the month. In New York, December exhibited a wide trading range of 74.89 to 80.39 cents per lb, whereas March, the current lead month, remained stuck in a narrow range of 77.70 to 82.34 cents per lb. Month-over-month, December experienced a loss of 182 points, while March concluded with a 345 points loss.
• In October, the New York Futures for December consistently fluctuate within a price range of 82 to 88 cents. On the other hand, March futures consistently exhibit a carrying cost with a price range of 84.5 to 88.5 cents.
"Navigating Challenges: A Recap of the 2022-23 Indian Cotton Market Season"
The Indian cotton market in the 2022-23 season witnessed a series of unique challenges and fluctuations, impacting both cotton mills and farmers. Here we provide an overview of the season, highlighting key events and factors that influenced cotton prices and market dynamics.
Gujcot Fourth Quarterly Rate Movement Report – 2022-23
We are here providing you comprehensive overview of the various factors affecting cotton prices and production during July-September period. Here's a summary of the key points:
1. Cotton Price NY Future Trends: The price of cotton in the NY futures market during July was in the range of 79-84 cents but moved higher to 84-88 cents in the following two months. There were attempts to break the resistance at 88 cents, but failed to sustain due to weaker demand and macroeconomic challenges.
Dec cotton futures gave up 53 points on the week (the very same 53 points it gained last week) finishing at 85.91, with the Dec – Mar spread strengthening a bit to (84). Last week, our models predicted a finish on the week that was to be near-unchanged to higher Vs the previous week’s finish, which proved to be correct. Dec has commenced the new week notably higher.
• During the August, the NY December Futures attempted multiple times to break out above the 88 cents level, but each attempt proved unsuccessful. The NY futures remained confined within a narrow range of 83 to 88 cents.
• The WASDE report delivered a bullish outlook as the U.S. Department of Agriculture (USDA) lowered the U.S. crop by 2.5 million bales. This bullish sentiment from the WASDE report initially pushed the NY futures toward the upper boundary of the established range.
• NY July Future expired on 8th July, and now the front month is December. NY December new crop future stayed within a narrow range for the first 18 days but then started to trend upwards after the 18th July. Some short covering and speculative buying pulled the market to a new high of 87.90, but it eventually settled near the mid-eighties.
Gujcot Third Quarterly Rate Movement Report – 2022-23
• During the third quarter of the cotton season (April to June) NY July future remained within a range of 77 to 87 cents, while December future remained within a narrow range of 77 to 84.
• The NY Future market attempted to break out of these ranges multiple times but was unable to sustain those breakouts. This suggests that there may have been various attempts to push the market beyond these established price levels, but the momentum was not strong enough to sustain the price movement outside of the given ranges.
The cotton market was somewhat higher Monday, inspired by adverse weather unfolding across the Belt, as well as continued supporters from Friday's acres report.
The cotton market was somewhat higher Monday, inspired by adverse weather unfolding across the Belt, as well as continued supporters from Friday's acres report.
• During the month of May, NY July cotton future have not been able to break out of the long-term range of 79-86. The latest WASDE report was somewhat favorable for the market, with an increase in U.S. exports and a decrease in ending stocks. Export sales have been decent, leading the U.S. Department of Agriculture (USDA) to raise the US export estimate from 12.2 to 12.6 million bales.
Cotton’s Slow Period Continues... But Planting Decisions Are Coming Soon
With the current season coming to a close it is time to start shifting our focus to the next season with high hopes and anticipation. Most of the Northern Hemisphere cotton producing countries have started planting, are preparing for planting, or are thinking about planting. Soil moisture is an essential ingredient for a successful planting operation.
Cotlook’s May supply and demand forecasts indicate lower consumption and higher world ending stocks for both 2022/23 and 2023/24
Cotlook’s forecast of global raw cotton output in 2022/23 has been reduced this month, by 69,000 tonnes to 24,852,000 tonnes. Reductions for the African Franc Zone and the United States were partially offset by increases for China and Australia.
Since plummeting to the low 70s last fall, new crop December 2023 futures roller-coastered up, then down, then up again to near 86 cents by the end of January. December 2023 has since teetered within a five-cent range of mostly 79 to 84 cents over the past five months.
• The first half of the month saw a narrow range of 80 to 85 cents for NY futures, but the second half was bearish with a range of 76.5 to 81 cents. USDA released the WASDE report, which was nearly neutral and did not cause any significant volatility.
Gujcot Second Quarterly Rate Movement Report – 2022-23
• Team Gujcot wishing happy and earning new financial year to all cotton friends.
• January-March quarter was volatile in all futures. Huge ups and downs were noticed during this period. Despite huge ups and downs range is very narrow. NY March was in 80.25 to 87.00 range while NY May moved in slightly bigger range of 76.54 to 88.02.
Indian Farmers Might Be Holding Their Cotton but Global Production Remains Stable
In this edition of Cotton This Month, we will examine the current situation with delayed cotton arrivals in India and how this may affect the global balance sheets in the 2022/23 season.
All cotton planted area for 2023 is estimated at 11.3 million acres, down 18 percent from last year. Upland area is estimated at 11.1 million acres, down 18 percent from 2022. American Pima area is estimated at 154,000 acres, down 16 percent from 2022.
Cotton set for best week in over 2 – months on strong export sales data
ICE cotton futures rose 3% on Friday and were headed for their best week in more than two months, supported by strong U.S. export numbers and on hopes of an uptick in demand from top consumer China.
Gujcot FIrst Quarterly Rate Movement Report – 2022-23
• Team Gujcot wishes happy, healthy and earning new year 2023 to all our friends.
• Year 2022 taught us many lessons. We witnessed extremely high rates. NY cotton future near 158 cents per lb. and Indian physical cotton rate crossed Rs one lakh per candy. Some sweet and some bitter memories of year 2022. first quarter of the Indian new cotton season and second quarter of US new cotton season was dominated by bears.
• November month started with sharp uptrend during the first week. NY Future closed limit up for the first four days in this month and jumped to 87 cents from 72 cents in just one week. There after remained highly volatility during the month.
The lack of demand is clearly a problem at the moment and as such the WASDE doesn’t reflect the right set of numbers in its balance sheet. While the supply side is now more or less known, the demand side is overstated by several million bales and will have to be adjusted lower over the coming months, which will have a bearish impact.
• October was month of continuous down trend. NY December future lost about 1300 points during the month. USDA WASDE was bearish. USDA reduced world consumption by 3 million bales so world ending stock was also up by 3 million bales. Recession fear in Europe and America has created downward sentiment.
• US Export sales was poor also some cancellation from China reason for downtrend. But US is well committed to reach USDA export target.
Cotton season 2021/22 was a very challenging one. Cotton market opened at its historically high level and climbed up to create a new historical high of Rs.100,000 plus per candy. Hence it proved that is very difficult for even experts to predict top and bottom of the cotton market. Market finds its own level.
Gujcot FIrst Quarterly Rate Movement Report – 2021-22
• Up trend in cotton prices during first quarter of new season has continued with cotton prices touching life time new high in Indian cotton. While in U.S. It is the second highest rate after 2011.
• Indian Mills earned well during first quarter with old crop CCI stock till October and new arrivals.
Uncertainty and panic over the OMICRON variant caused the cotton market, along with many other commodities, to drop significantly in price over the past 2 weeks.
Production, Consumption and Trade are Expected to Increase in 2021/22
For the current season, the global production estimate for 2020/21 has been reduced to 24.3 million tonnes this month with smaller crop estimates expected for India, Brazil, and the United States. For India, the latest meeting of the Committee on Cotton Production and Consumption (COCPC) reported production for 2020/21 at 6.12 million tonnes. With the country under crisis from a second wave of COVID-19, mill-use has been revised down to 5.15 million tonnes.
Procurement operations of seed cotton (Kapas) under MSP are going on smoothly in the States of Punjab, Haryana, Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, Telangana, Andhra Pradesh, Odisha and Karnataka. Till 23.03.2021 a quantity of 91,86,803 cotton bales valuing Rs.26,719.51 Crore has been procured benefitting 18,86,498 farmers.
All international benchmark prices increased over the past month.
The NY December futures contract climbed from 67 to as high as 72 cents/lb near the end of October. More recently, prices eased back to 70 cents/lb. Cotlook’s A Index rose from 73 to 76 cents/lb over the past month.
Changes in Supply and Demand Estimates (from 17 August 2020)
Limited Cotton Recovery within Pandemic: Production and Stock Levels High, Slow Consumption Growth
Even as the most stringent containment measures begin to be lifted, the opportunity for economic recovery may not relieve current market uncertainty. Countries vary in their ability to flatten the contagion curve and the fiscal space to mitigate the pandemic associated recession.
Movement in benchmark prices was mixed over the past month.
The NY December futures contract moved lower (to below 60 cents/lb in late July) and then higher (near 65 cents/lb in early August) over the past month. Current values (63 cents/lb) are nearly even with those from one month ago.
A cyclonic circulation is over East Uttar Pradesh and adjoining area. Another cyclonic circulation is over Central Pakistan. A trough is extending from central Pakistan to Bangladesh across Rajasthan, South Uttar Pradesh, Jharkhand and West Bengal in lower levels. A cyclonic circulation is over central parts of Assam. A cyclonic circulation is over south Konkan. A shear zone is extending from this cyclonic circulation to Chhattisgarh across North Interior Karnataka and Telangana.
U.S. producers will plant 13 million acres in 2020
U.S. cotton producers intend to plant 13 million cotton acres this spring, down 5.5% from 2019 (based on the U.S. Department of Agriculture’s February 2020 estimate), according to the National Cotton Council’s 39th Annual Early Season Planting Intentions Survey.
Cotton Inc. Executive Cotton Update - February 2020
Executive Cotton Update - February 2020
Macroeconomic Overview: The Bureau of Economic Analysis estimates that the U.S. economy grew 2.3% in 2019. Forecasts suggest that growth could slow a little in 2020, with many projections falling between 1.9% and 2.1%. For comparison, in 2018, growth was 2.9% and in 2017 growth was 2.4%.
Highlights from the Inaugural Session of the 78th Plenary Meeting:
Consumers today are increasingly demanding information on the origin and history of the products they buy, putting pressure on retailers to provide transparency
Multiple technologies have the potential to provide that traceability, including blockchain and a host of products from private companies
Gujarat cotton crop is estimated as 1,06,94,302 Bales out of which 2,75,000 Bales will be of V-797 rest will be Shankar-6. Gujarat cotton crop yield is expected to rise by 32.97% and crop is expected to increase by 30.83%
we estimate total Gujarat cotton pressing to be 120-125 Lakh Bales of 170 Kg.
The Season 2018 -2019 started with bullish sentiment in India. Indian cotton crop was predicted 343 lakh bales at the start of the season against 365 to 375 lakh bales of season 2017-2018. Opening stock was low and mills requirement of new cotton was high. With bull sentiment season touched double top at 47,150 on 15th October at the start of the season.
The latest U.S. Department of Agriculture (USDA) estimates indicate that total U.S. cotton textile and apparel trade rose during the first half of 2019, compared with the corresponding 2018 period. U.S. cotton product imports totaled the equivalent of 9.0 million 480-pound bales of raw cotton during January-June 2019—compared with 8.8 million bales for the first 6 months of 2018—while cotton product exports declined slightly to 1.7 million bale-equivalents.
Cotton Textile exports reached a level of USD 739.17 million in June 2019 marking a decline of (-) 30.4 per cent against the corresponding month of June 2018, wherein exports were valued at USD 1,061.96 million.
In rupee terms, exports during the month of June 2019 reached a level of Rs. 5,132.72 cr. as against Rs. 7,199.39 Cr. in June 2018 marking a decline of (-) 28.7 per cent in rupee terms.
China cotton imports in 2019/20 are expected to surpass the previous year’s robust level, reinforcing its position as the world’s largest importer. The current 2018/19 estimate, boosted this month, is expected to be the largest in 5 years as China supplements domestic supplies amid ongoing auctions of State Reserve stocks. Despite this strong upward trend in imports, U.S. exports to China have weakened as Brazil, Australia, and other countries have expanded both exports and market share.
While corn remains the major safrinha crop for Brazilian farmers, more cotton acreage is being planted in Mato Grosso this spring, as well.
Over the past two years, cotton planting has increased by nearly one-third for the safrinha in Mato Grosso. The Brazilian Association of Cotton Producers(Abrapa) forecast cotton acreage to grow to 1.4 million hectares (3.46 million acres). Mato Grosso accounts for about 88% of Brazil’s cotton production.
Historical Revisions to Indian's Cotton Balance Sheet - USDA
Historical Revisions to Indian's Cotton Balance Sheet - USDA
Historical revisions have been made to India’s balance sheet for the years 2002/03 through 2013/14, with the stock adjustment carried forward. The revisions are based on the conclusion that market yard arrivals data underreported arrivals in the early portion of the harvest season. This conclusion was based on observed market activity in November for several years.
