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Cotton Futures Rise Amid Mixed Export Sales Data

Cotton futures experienced notable gains due to supportive outside market conditions. Analysts need to pay attention to USDA reports and international trade patterns as they could significantly impact cotton-related investments.

Date: 
AI Rating:   6

Market Overview: Cotton futures gained traction on Thursday with significant point increases across various contracts. This movement can be attributed to supportive external market conditions, including a rise in crude oil prices and a decline in the US dollar index, creating a conducive backdrop for commodity pricing.

Export Sales Impact: USDA Export Sales data revealed 84,405 RB for the 2024/25 cycle, marking a seasonal low, with substantial orders from Pakistan and Vietnam. However, the net reduction in Chinese orders indicates a potential weakening demand from one of the largest cotton consumers, which warrants caution among investors. The new crop sales totaling 41,624 RB being the lowest in four weeks might also foreshadow a decrease in market optimism.

Shipping and Prices: The reported shipment total of 396,407 RB is notably strong and should bolster confidence in the market. Coupled with solid shipments to Vietnam, Turkey, and Pakistan, this data may reassure investors of ongoing global demand despite mixed sales figures. Additionally, the average price in online sales at 67.16 cents/lb exhibits market resilience, although the decrease in the Cotlook A Index could signal tightening margins for producers.

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