– Reporting Period 25 Oct – 07 Nov 2023 –
The downward trend of the ICE Cotton No. 2 futures accelerated significantly during the reporting period. The December futures dropped to 76 ct/lb, their lowest level since April this year. Market observers have been speculating about this heavy loss since no clear reasons could be identified.
Concerns have remained regarding China’s consumption as primary buyer of U.S. cotton. At last, though, the country covered a large part of its demand with cotton from Brazil. Nevertheless, the purchased volume of U.S. cotton stayed at a level that should have positive impact on the futures. Various military conflicts, however, have led to stock market losses in general reflecting current concerns with respect to the worldwide economic development. The cotton futures were also not able to defy this trend.
Even though the physical quotations followed the downward trend of the U.S. market, the price movements were less pronounced. The course of the price curve was flatter than the one of the futures. In return, the euro gained slightly against the U.S. dollar but had only limited influence on the market development. Noteworthy sold volumes still failed to appear despite the lower price level and beneficial exchange rates conditions.
This unpredictable market development has left many experts somewhat perplexed and worried about the future.