For the holiday-shortened week ending Friday, June 20, ICE cotton futures started off very flat, then slid to two-month lows, briefly popping up on Friday (see chart above courtesy of Barchart.com). New crop Dec’25 settled Friday at 66.70 cents per pound, while “Red” Dec’26 settled at 68.08. Chinese cotton prices were mixed, as was the A-Index of world cotton prices.
Across the week ending June 20, CBOT corn and soybean futures, as well as KC wheat futures dipped early and then trended higher across the week. ICE WTI crude oil futures also first declined, then recovered, and ending the week in a flat pattern. The U.S. dollar index weakened early and late in the week, sandwiching an uptrend associated with a flight-to-safety from international tensions. It remains uncertain how financial markets will react as they approach the end of the 90 day hiatus on U.S. tariffs on its trading partners. Other macro influences (i.e., GDP, inflation, and interest rate policy) remained mixed in their expectation and implication.
Cotton-focused market influences this week included continued weekly reports of very light to moderate regional demand for U.S. cotton. There were continued weak old crop U.S. export net sales for the week ending June 12, although this may be more of a function of reported light supplies. Moreover, weekly net sales for the next marketing year were pretty decent at 275,000 bales of upland. The pace of 2024/25 export shipments continued above the weekly average level needed to reach USDA’s target level of exports (11.5 million bales). All of the projected U.S. old crop production has been ginned and classed since about April. New crop influences included continued rainy weather over the eastern U.S. Cotton Belt, while the early arriving Indian monsoon is forecasted to resume.
For the week ending Thursday, June 12, the day-to-day shifts in ICE cotton open interest steadily declined. Coupled with the mostly lower futures settlements, this has the appearance of long liquidation. Confirming CFTC data will have to wait til Monday. Until then, the most recent weekly (Tuesday, June 10) snapshot of speculative open interest showed a mixed bag with more short short positioning in the form of 391 fewer (liquidated) hedge fund long positions reinforcing 5,608 additional hedge fund short positions, week over week. However, this was partially countered by a 2,223 contract expansion of of the index trader net long position, week over week.
The dynamics of ICE cotton futures may also represent a wet blanket on the market. It remains true that unfixed call sales (by mills) are at an historically low level, perhaps reflecting the cautionary buying on the demand side. In terms of ratios, unfixed call purchases (by suppliers) outweigh unfixed call sales by two-fold across all contracts, as of June 13.
For more details and data on Old Crop and New Crop fundamentals, plus other near term influences, follow these links (or the drop-down menus above) to those sub-pages.
Source: TAMU