Mixed Opinions Surface during Monday's Morning Discourse about Cotton
Mixed Start for Cotton Prices, Crude Oil Under Pressure
Monday's cotton action was a mixed bag, with July contracts descending by 8 points and others ascending by 5 to 8 points. In contrast, crude oil prices were feeling the heat, dropping 80 cents, as whispers of further OPEC output hikes circulated.
Meanwhile, the US dollar index took a dip, falling by $0.189 to $99.840.
The Speculative Net Short position for Commitment of Traders (COT) data, as of Friday afternoon, revealed a reduction from 11,206 contracts to 26,231 contacts by Tuesday.
Crude oil prices have been on a downward spiral since the start of 2025, with Brent crude at $65.09 and other benchmarks hovering around $62 per barrel. The drop can be attributed to economic growth concerns and a decline in global demand growth, which was revised down to 730 kb/d for 2025.
While we don't have the latest numbers for the US dollar index, it's a vital factor influencing commodity prices, as it indicates exchange rates.
The Thursday online auction from The Seam showed 1,752 bales sold at an average price of 66.20 cents/lb, with the Cotlook A Index dropping 50 points to 77.50. As for ICE cotton stocks, they experienced an increase of 99 bales on new certifications on May 1, with a certified stocks level of 14,577 bales. The USDA's Adjusted World Price (AWP) climbed 6 points to 54.94 cents/lb, effective until the following Thursday.
May 25 Cotton closed at 70.18 (unch), July 25 Cotton closed at 68.41 (up 275 points, currently down 8 points), and Dec 25 Cotton closed at 69.71 (up 228 points, currently up 5 points).
On a related note, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article at the time of its publication. All information and data in this article are for informational purposes only. For more details, please visit our Disclosure Policy.
[Sources: 1, 2, 3, 4, 5]
Note: As per the enrichment data, recent trends for cotton prices indicate a weekly gain for July contracts, albeit with a slight decline to 68.80 cents per pound. The low demand for cotton is attributed to issues like inflation, high interest rates, and dismal export sales, despite potential increases from countries such as Pakistan and Bangladesh. The US dollar index data provided in the enrichment does not exactly match the current situation in the article, but it does indicate its importance in understanding exchange rates and their impact on commodity prices.
The energy sector may be impacted by drops in crude oil prices, as Brent crude has been on a downward spiral since the start of 2025, with global demand growth revised down to 730 kb/d for 2025. In the finance world, the Speculative Net Short position for Commitment of Traders (COT) data showed a reduction over a certain period, suggesting possible market shifts in the industry.
