Market Trends: Analysis Of The Trend Data Of ICE Cotton In The Recent Week

Cotton prices fell last week, while the stock market reversed some recent declines. Export shipment remained strong, but demand from cotton mills was weak. Weak prospects for technology and fundamentals, as well as broader economic factors, put pressure on prices.

ICE May cotton contract fell 0.81 cents to settle at 65.27 cents/lb.

ICE July cotton contract fell 0.78 cents to settle at 66.79 cents per pound, the lowest point hit 66.76 cents per pound in the session, the lowest level since March 11 of the contract. The contract fell 2.5% weekly..

Due to limited information on specific markets, cotton futures fell in 5 trading days this week. Although the price was lower, the daily trading range remained relatively narrow. Speculators continue to hold record high short positions, and the prospects for cotton technology remain weak. Meanwhile, with the start of planting, the hot and dry weather in South Texas is still worrying. Crop planting is slow and may be behind the normal progress.

The United States Department of Agriculture (USDA) announced that it will accelerate the provision of $10 billion in direct economic assistance to agricultural producers through the Emergency Commodity Assistance Program (ECAP), which is applicable to the 2024 crop year. Producers must report their planted and uncultivated areas to the Agricultural Services Agency (FSA) in the 2024 crop year to obtain qualification. ECAP applications must be submitted to the local FSA office by August 15, 2025. The initial payment will be calculated at the rate of 85%, while the area not planted will be calculated at the rate of 50%, based on the area rather than the yield. The standard of payment for cotton is US $84.70 per acre.

The trading volume was flat, and the position increased by 1184 hands, reaching 275081 hands in total. According to the data released by ICE, the inventory of No. 2 cotton delivery contract deliverable by ICE was unchanged at 14488 bales as of March 20.

The market pulled back some losses after the Federal Reserve kept interest rates unchanged, suggesting that the recent rise in inflation may be related to tariffs and is temporary.

The Federal Reserve Board of the United States ended its two-day monetary policy meeting on the 19th and announced that it would maintain the target range of the federal funds interest rate at 4.25-4.50%. Since the meeting at the end of January, the Federal Reserve has again decided to keep interest rates unchanged. They mentioned their concern about the impact of tariff and price increases on inflation, suggesting that the recent rise in inflation may be related to tariffs and may be temporary - the market is positive about this news. At the same time, the Bank of England kept interest rates unchanged this month, as global economic uncertainty, rising inflation and tariff threats hindered further interest rate cuts.

Compared with recent weeks, there was significantly less tariff related news this week, and the market focused on the progress of Russia Ukraine ceasefire agreement negotiations.

The dollar fell to a five month low. At the same time, a stronger Brazilian real helped boost demand for American goods. Despite the slowdown in demand, this exchange rate change may make it more affordable for other countries to import US bulk commodities.

US retail sales in February were lower than expected, with a monthly growth rate of 0.2%, compared with the market expectation of 0.6% growth. In February, retail sales grew at an annual rate of 3.1%. Sales of clothing and clothing accessories fell 0.6% in the month, but increased 1% in the whole year.

Thursday's export sales report disappointed, but export shipment remained strong

According to the export sales report released by the United States Department of Agriculture (USDA), in the week ended March 13, the net export sales of American cotton in the current year increased by 101100 bales, 63% less than the previous week, and 59% less than the average of the previous four weeks. Next year, the net export sales of American cotton increased by 57900 bales. The export shipment of American cotton was 351000 bales, 13% less than the previous week, and 8% more than the average of the previous four weeks, of which 14900 bales were exported to China.

Although the sales were disappointing, it was not totally unexpected considering the trade conflict and tariff impact.

As it is in the peak transportation season, export shipment is still strong, exceeding the speed required to realize the current export estimate of 11 million bales of USDA.

Most cotton mills are interested in 65 cents or less, and the market remains above 65 cents during this period.

Therefore, the demand is sluggish and the inquiry during the reporting period is light. In addition, the recent tariff policy has led to a shift in sales from China to Vietnam.

Pima cotton sales and export shipment reached the highest level in the year. The sales volume reached an annual high of 26500 packages, and the export shipment reached 16700 packages.

The market will continue to pay attention to the progress of tariffs. In addition, the US will release consumer confidence and GDP data next week.