Mumbai, 27 Jun (Commoditiescontrol): ICE cotton futures slipped from a near one-month high on Wednesday, influenced by a stronger US dollar which made the natural fiber more expensive for holders of other currencies, thereby denting demand. The July ICE cotton futures contract rose by 10 points, closing at 72.70 cents per pound. The December contract gained 27 points to 75.34 cents, and the March contract added 33 points, settling at 76.75 cents. This rise was largely driven by short covering amid forecasts of dry weather conditions across Texas and other southeastern regions. However, external factors such as a decline in crude oil prices by 7 cents per barrel and a rise in the US dollar index by 461 points negatively influenced the market.
Friday will be a significant day for traders with the release of the June Acreage report by the National Agricultural Statistics Service (NASS). Traders are estimating an average increase of 156,000 acres in cotton acreage from the March Intentions report, bringing the total to 10.829 million acres, with estimates ranging from 10.5 to 11.2 million acres.
The weekly NASS Crop Progress report indicated an overall crop condition rating increase of 1% to 56% good/excellent. However, the Brugler500 index dropped 4 points to 342 due to more very poor ratings. State-specific ratings showed Texas down 4 points to 324, and Georgia down 2 points to 353.
ICE certified cotton stocks decreased by 2,819 bales on June 25 to 100,381 bales. The Cotlook A Index rose 125 points on June 25 to 83.45 cents/lb, while the USDA Average World Price (AWP) decreased by 67 points to 56.65 cents per pound last Thursday, remaining in effect through tomorrow.
Cotton speculators increased their net short position by 8,194 contracts to 51,442 in the week ending June 18. The USDA's World Agricultural Supply and Demand Estimates (WASDE) report cut U.S. export projections by 500,000 bales to 11.8 million, raising old crop stocks to 2.85 million bales and new crop ending stocks to 4.1 million bales. The global carryout for 2023/24 increased by 490,000 bales to 80.97 million, with new crop projections rising by 489,000 bales to 83.49 million.
Traders are closely monitoring technical support levels for the December Cotton contract at 74.72 and 74.11 cents, with resistance expected at 75.67 and 76.01 cents. The focus remains on the USDA's annual acreage report, scheduled to be released at noon EDT (1600 GMT) on Friday, June 28.
(By Commoditiescontrol Bureau: 09820130172)
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