Cotton Futures Decline Following Weak Export Sales Data

Cotton futures are weaker as USDA’s Export Sales report shows a significant drop. This decline in sales could exert pressure on cotton prices, especially with weaker export numbers than expected.

Date: 21-03-2025

AI Rating: 5

Commodity Performance and Export Sales
Cotton futures are experiencing a decline, attributed largely to the USDA’s report on export sales, which showed a total of 101,058 RB for the week of March 13—this is the lowest recorded since October. However, it is notable that this figure is still 9.11% larger than the same week last year, indicating a potential for recovery.

The report details that Vietnam was a major buyer, purchasing 73,100 RB. Conversely, China canceled a notable amount of cotton, totaling 49,300 RB. This cancellation could signify shifts in demand, potentially impacting future pricing.

Market Conditions
Cotton shipments have decreased to 351,003 RB compared to the week prior, which could hint at declining demand or logistical challenges affecting how much product is reaching buyers. With the largest destination still being Vietnam, tracking their purchasing patterns will be crucial for future price movements.

Additionally, the Cotlook A Index has fallen to 78.50 cents/lb, indicating a shifting pricing landscape which might compress margins for cotton producers. The average price reported from the Seam at 61 cents/lb for 205 bales is low as well, reflecting weak market activity. The USDA did increase the Adjusted World Price (AWP), signaling a potential increase in pricing but the overall downward momentum in futures may dominate sentiment in the short term.

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