– Reporting Period 02 – 15 August 2023 –
At the beginning of the reporting period, the ICE Cotton No. 2 Futures continued to show a calm sideways movement with a weak upward trend. Upon the release of the latest USDA (WASDE) crop estimates last Friday, the futures briefly surged upward, coming just shy of the 90 cents/lb mark. As reported on page 1 of this report, the USDA anticipates a significantly lower cotton production in the current 2023/24 season. This shift in the supply and demand ratio led to the momentary price jump.
By the start of the week, the prices quickly settled down again, falling back to the old mid-80s level by the end of the reporting period. A stronger dollar as well as widespread concern over the Chinese economic situation further weighed down the prices. The demand side, with China being one of the key players, also remains fraught with uncertainty.
Not much movement was observed in the European market. Although the summer holiday season with factory closures is slowly winding down, the demand appears to be adequately met and only occasional quantities were requested.
Bremen, August 17, 2023