– Reporting Period 16 August – 29 August 2023 –
At the very beginning of the reporting period, the ICE Cotton No.2 futures continued their drop following the short-term peak caused by the USDA outlook in August. For the rest of the week, the futures stayed just below the 84 cent/lb mark. The futures skyrocketed again during the second week, with December futures gaining 3.600 points by the weekend. The market lingered at this level at last. Analysts consider both a further gain to above the 90-cent mark and losses to below 80 cents.
This reporting period already revealed a discrepancy between fundamental market data and the price development: Even though the demand situation has been continuously blurry to bleak, the futures initially increased considerably. Concerns regarding the further deteriorating U.S. crop as well as the higher cotton prices in China currently seem to be dominating this development. In the long-term, however, the demand is expected to be more decisive for the market trend.
The currently high prices have led to a rather cautious approach to deals in Europe. A wait-and-see attitude has continued to prevail. No major fears of sharply rising prices were apparent. The predominantly specialized processors in Europe satisfy their needs rather in the short-term. Following the two quiet months July and August, hopes are growing for a revival in September.
Bremen, August 31, 2023