– Reporting Period 05 July – 18 July 2023 –
The ICE Cotton No. 2 futures have moved largely sideways during the reporting period. The futures dropped for a short-term when the trading months changed from July 2023 to October 2023. On the next day, however, they already recorded a rebound close to the trading limit. Even market participants of many years’ standing were at a loss regarding these price movements and their causes. Demand for cotton was mostly weak. Even though the US dollar lost ground compared to other currencies, this did not boost demand. At the end of the reporting period, the futures showed a slightly positive trend.
The WASDE report revealed a rather bearish forecast for the season starting in two weeks. Slightly reduced exports in the USA, larger production volumes in Australia and Brazil in the current season as well as a globally reduced consumption forecast led to higher estimated cotton stocks, thus a surplus of cotton.
The holidays have started throughout Europe. Hence, this market experienced rather restrained business with only few active actors.