CME Cotton #2 Futures Market News and Commentary
Cotton futures closed Friday ~20 points off their lows, but still 58 to 115 points in the red. The March contract printed a 200 point range from -147 to +54 points. The March contract completed the week with a net 2 cent gain. Daily futures trading limits will expand to 4 cents per pound (400 points) since prices are back above 80 cents. USDA left the average cash price at 77 cents/lb.
The weekly Commitment of Traders report had managed money funds as buyers in cotton during the week that ended 12/15. That extended the group’s net long by 1,534 contracts to 2,229. Commercial cotton hedgers were adding short hedges for a 2.9k contract stronger net short of 41,204 contracts.
USDA’s monthly data cut cotton yield by 18 lbs/acre to 765 – now the weakest since 2003, though similar to 2015. That on net reduced supply by 310k bales to 12.78 million. USDA cut domestic use by 150k, and lowered the unaccounted line, for a net 100k bale tighter carryout of 3.1 million bales. On th... Read more