Cotton Futures Show Losses Amid Support from Crude Oil

Cotton futures are experiencing losses as seen in the latest report. The decline in cotton is partially mitigated by a rise in crude oil prices. Investor focus will be on potential impacts on related stocks due to these price movements.

Date: 18-03-2025

AI Rating: 5

Market Overview: Cotton futures have reported losses ranging from 7 to 36 points. This indicates a downward trend in cotton prices, which could impact profitability for companies involved in cotton production.

Crude Oil Prices: The rise in crude oil prices, up $0.31 per barrel, may provide some support to the overall market dynamics. However, the influence on cotton prices remains critical for cotton-related stocks.

Managed Money Positions: Speculative funds in cotton futures have reduced their net short positions by 3,547 contracts from a previous record of 76,410 contracts. This reduction may indicate a shift in market sentiment and could attract investor interest.

Sales and Pricing: The recent online auction from The Seam reported 2,123 bales of cotton sold at an average price of 64.18 cents/lb, while the Cotlook A Index fell by 45 points to 78.40 cents/lb. The reduction in the Cotlook A Index could negatively affect companies dealing with cotton, as lower prices can compress margins. Moreover, ICE cotton stocks remained steady, which signals a balanced supply and demand situation.

Adjustments by USDA: The increase in the USDA’s Adjusted World Price (AWP) by 188 points to 53.76 cents/lb may slightly benefit producers, but overall, the price levels are relatively low.

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