Cotton futures are starting off Thursday with another 40-50 point gains. OI data from ICE showed Tuesday action was net new buying, while traders rolled out of March to the deferred contracts yesterday. Cotton traded both directions on Wednesday, leading March to a 125 point range for the day. Prices ultimately closed near the session highs with 35 to 59 point gains across the front months. The Dollar Index continued the downtrend on Wednesday, printing lows not seen since July as US interest rates weaken.
Reports from Mato Grosso show second crop cotton planting is underway. Some farmers have reportedly abandoned the soybeans to begin cotton planting. The second-crop cotton represents ~85% of the nation’s total cotton production in a typical year. USDA’s WAOB is forecasting 14.56m bales output for Brazil in 2023/24, a 24% increase from the year prior.
The Cotlook A Index dropped 10 points on 12/22 to 89.40 cents. The AWP for the week is 63.80 and will be in effect until Thursday evening. The ICE certified stocks for 12/19 were 5,141 bales.
Mar 24 Cotton closed at 80.53, up 48 points, currently up 45 points
May 24 Cotton closed at 81.56, up 59 points, currently up 49 points
Jul 24 Cotton closed at 82.19, up 59 points, currently up 42 points
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