Market Observation: Cotton Futures Prices On The Intercontinental Exchange (ICE) Rose Over The Weekend

As of the week of April 11 (Friday), the cotton futures of the Intercontinental Exchange (ICE) had rebounded from the low end of 60 cents to the high end of 60 cents. The most actively traded July contract rose 0.01 cents or 0.1% to 67.01 cents/pound on Friday, up more than 3% this week. The December contract closed at 68.51 cents that week. This week, most of China's cotton prices fell, and the Cotbook A (FE) cotton price index rose and fell with each other.

In other markets, the Chicago Board of Trade (CBOT) corn, soybean main contracts, and KCBT wheat futures finally showed an upward trend this week. Corn went up, while soybeans went up first and then went up. The dollar index was initially flat and then fell. The expectations and impacts of other macro impacts (such as GDP, inflation and interest rate policies) are still mixed. The weakness of the US dollar is related to the performance of currency and bond markets and global trade concerns.

This week, the main impact of the cotton market included the neutral to bearish forecast of the United States Department of Agriculture (USDA). USDA's April supply and demand forecast report shows that American cotton exports are expected to decrease by 100000 bales to 10.9 million bales. It is possible that by the beginning of April, all the old crop production in the United States will be crushed and classified (the final report on crushing and classification will be released in May). The US export sales reports in January and February both showed a slight upward trend, but since the middle of March, the weak export sales data has interrupted this trend. The number of export shipments in 2024/25 continues to be higher than the weekly average level required to reach the US Department of Agriculture's export target level (10.9 million packages).

The export sales report released by the US Department of Agriculture (USDA) on Thursday showed that in the week ended April 3, the net export sales of US cotton in the current year increased by 115100 bales, 11% less than the previous week, and 21% less than the average of the previous four weeks, including a net decrease of 1800t in export sales to China. 377200 bales of American cotton were shipped for export, 4% less than the previous week, and 2% less than the average of the previous four weeks, of which 5700 bales were shipped for export to China.

As of the week of April 10, the daily change of ICE's cotton position reflected the closing position, that is, the position decreased throughout the week. This mode coincides with the rise of the settlement price, giving a sense of short covering. However, due to the large scale of fund operations, it is difficult to judge. According to the data released by the U.S. Commodity Futures Trading Commission (CFTC), as of the week of April 1, speculators had reduced their net short positions of ICE cotton futures and options from 6130 to 68555.

In addition, unfixed Call Sales at the price of ICE cotton 2505 contract decreased by 2209 orders to 8893 orders compared with the previous week, perhaps reflecting cautious buying on the demand side.