Cotton Futures Rally Amid Support from Crude Oil and US Dollar

Cotton futures rallied this week, showing significant gains as May contracts rose 130 points. The investment landscape appears optimistic, supported by favorable movements in crude oil and the US dollar index.

Date: 15-03-2025

AI Rating: 7

Cotton Futures Performance: Cotton futures experienced a notable rally, with contracts closing up significantly. Specifically, May rose by 130 points this week, indicating a robust performance for cotton futures in the market.

Managed Money Positions: The adjustments in managed money positions are also noteworthy. Large managed money spec funds trimmed their net short position in cotton futures and options, reducing it from a record high of 76,410 contracts. This reduction is a positive sign, suggesting a potential shift in market sentiment.

Market Support Factors: The support for cotton prices has been attributed to a rise in crude oil prices, up $0.64 per barrel, alongside a decrease in the US dollar index by $0.155. These factors contribute favorably to the commodity's pricing, influencing investor confidence in the cotton market.

Price and Stock Levels: The Cotlook A Index also saw an increase, up 100 points to 78.85 cents per lb. Furthermore, the USDA's increase in this week’s Adjusted World Price (AWP) by 188 points to 53.76 cents/lb adds to the positive dynamics affecting cotton prices.

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