Cotton Prices Soar: Futures Hit 3-Month Peak as Grain Markets Fuel the Surge

Cotton futures hover near 3-month high, supported by gains in grain markets

——International Cotton Daily (09-23)

Source: Jinqiao Textile Network 2024-09-24 06:09:59 Editor: KK

1. Futures

ICE cotton futures were little changed on Monday, hovering near a three-month high, supported by broad gains in agricultural markets as traders assessed the impact of an Atlantic tropical cyclone on crops in some key growing regions.

ICE December cotton contracts fell 0.08 cents to settle at 73.44 cents per pound.

“This unorganized low pressure system could move into Alabama, Georgia, Florida on Thursday, where a lot of cotton is in full boll stage,” said Rogers Varner, president of Varner Brokerage in Cleveland. “It won’t destroy it, but it will affect its quality.”

The U.S. National Hurricane Center (NHC) said on Monday that potential Tropical Cyclone 9 formed about 350 miles (565 kilometers) south-southeast of the western tip of Cuba and was expected to develop into a hurricane as it moves across the eastern Gulf of Mexico on Wednesday.

“The Chicago grain market is doing very well, with corn, wheat and soybeans all up, which is a little bit positive for cotton.”

Wheat prices rose in Chicago, supported by concerns about bad crop weather, while soybean futures rose as dry weather delayed soybean planting in Brazil, the world’s largest exporter, also supporting corn prices.

NYMEX crude oil futures closed lower on Monday as disappointing eurozone business activity and weak Chinese economic data heightened concerns about demand.

High oil prices make polyester, a cotton alternative, more expensive.

U.S. stocks closed slightly higher on Monday as investors assessed whether the second week of market gains following the Federal Reserve’s rate cut would become a trend. Wall Street continued to climb after last week’s surge following the Federal Reserve’s rate cut, with speeches from several Fed policymakers and data showing steady U.S. business activity.

After the close of Monday, the U.S. Department of Agriculture (USDA) announced in its weekly crop growth report that as of the week of September 22, 2024, the quality rate of U.S. cotton was 37%, 39% in the previous week, and 30% in the same period last year. The harvest rate of U.S. cotton was 14%, 10% in the previous week, 12% in the same period last year, and the five-year average was 12%.

Data released by ICE showed that as of September 20, ICE’s deliverable No. 2 cotton futures contract inventory remained unchanged at 265 bales.

Foreign exchange market: The US dollar index rose. Stock market: U.S. stocks closed slightly higher on Monday as investors assessed whether the second week of market gains after the Federal Reserve’s rate cut would form a trend. Oil market: Oil prices closed lower as disappointing eurozone business activity and weak Chinese economy heightened concerns about demand.

2. Spot

On the 23rd, the CotlookA index was 85.05 cents/pound, up 50 points.