Market Observation: Cotton Futures Of The Intercontinental Exchange (ICE) Rebounded In Turmoil

On May 2 (Friday), the cotton futures of the Intercontinental Exchange (ICE) rebounded from the over two-week low hit on the previous trading day, benefiting from the optimistic expectation of the trade agreement.

ICE July cotton contract rose 2.75 cents or 4.2% to settle at 68.41 cents/pound, the lowest level since April 15 the previous day. Cotton fell 0.6% weekly.

The rising stock market and rising soybeans supported cotton prices.

Wall Street stocks closed higher on Friday, rising for the second week in a row, helped by strong economic data and possible easing of trade tensions.

According to the US agricultural drought document compiled by the Office of the Chief Economist (OCE) of the USDA based on the US drought monitoring map released on the same day on Thursday local time, as of April 29, about 21% of the US cotton producing areas had been affected by drought, compared with 21% the previous week.

The export sales report released by the US Department of Agriculture (USDA) on Thursday showed that in the week ended April 24, the net export sales of US cotton in the current year increased by 108400 bales, 4% higher than the previous week, and 21% lower than the average of the previous four weeks. In the next year, the net export sales of American cotton increased by 32900 bales. The export shipment of American cotton was 36600 bales, an increase of 25% over the previous week and 5% over the average of the previous four weeks, including 10800 bales exported to mainland China.

According to the data released by ICE, as of May 1, the inventory of No. 2 cotton contract deliverable by ICE was 14577 bales, compared with 14478 bales the previous day.

Foreign exchange market: The dollar index fell. Stock market: The three major stock indexes of New York stock market rose. Oil market: international oil prices fell.

Spot: The Cotbook A index fell 50 points to 77.50 cents/pound on the first day.

Future Outlook

This week, trade policy and economic issues will remain the focus, and the Federal Reserve will make interest rate decisions on May 6-7. In addition, economic data is expected to be relatively small this week.

The USDA report will release the monthly supply and demand report on May 12. The US Department of Agriculture will estimate the output based on the expected planting area report in March, which sets the planting area of US cotton at 9.867 million acres. In the southwest, Texas has a planting area of 5.527 million acres, Oklahoma 413000 acres and Kansas 140000 acres. The weather is good in the near future. Although the planting area is reduced, it can still support the increase of crop production. However, as May is usually the wettest month, and summer weather is often difficult to predict, the planting area in 2025 is still uncertain.