Cotton Continuing to Slide Lower on Thursday


Cotton prices are trading 10 to 25 points lower ahead of USDA’s weekly Export Sales release. Futures got Wednesday selling pressure from USDA data, as contracts were down 46 to 99 points.  The US Dollar Index was down 494 points on the day. CPI data came in at an annualized rate of 3.3% for May, below the 3.4% estimate and 3.4% from April. Core CPI was 3.4%, vs. the 3.5% estimate. The FOMC announced no rate changes for this month, signaling 1 possible rate cut in 2024 via their dot plot.

The monthly WASDE update showed a 500,000 bale cut to the US export figure at 11.8 million bales. That helped to raise the old crop stocks by 450,000 bales to 2.85 million. As for the new crop numbers, USDA left the output alone, as expected, but raised the ending stocks number by 400,000 bales to 4.1 million, thanks to the increased carryover from 2023/24.

The world data showed a 490,000 bale increase to the 23/24 carryout, at 80.97 million bales. New crop was taken 489,000 bales higher to 83.49 million bales, on the increased carry. 

Warehouse cotton stocks continue to build, as ICE certified cotton stocks were up 1,814 bales on June 10 at 134,938 bales. There were 3 decerts, with 4,988 bales awaiting review. The Cotlook A Index was back down 170 points on June 11 at 81.95 cents/lb. The USDA Average World Price (AWP) is 58.13 through this afternoon.  

Jul 24 Cotton  closed at 71.74, down 99 points, currently down 13 points

Dec 24 Cotton  closed at 71.65, down 78 points, currently down 25 points

Mar 25 Cotton  closed at 73.16, down 72 points, currently down 20 points

On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.