US Cotton Futures flat but position unclear
US cotton futures on the ICS remained largely unchanged on Wednesday amid light trading as traders were looking for a way forward from a weekly federal report on US export sales. The July cotton contract settled up 0.04 percent at US cents 79.39 per pound, after touching the highest since 16 March at US cents 79.74 early in the day. The weekly export sales data will be released by the USDA today.
Total volume rose 3,243 to 24,020 lots while data showed total open interest rising 2,744 contracts to 247,883 on Tuesday.
World cotton supply and demand estimates for 2016-17 show a modest net increase in world production, particularly in China, Brazil and several other countries and partially offset by a reduction in Australia. While the going ahead is US exports for the new crop market the old crop was driven by the boom in US exports. This is clearly visible from the uptrend in both price and export sales in the past seven months, implying rise in demand.
Demand for US cotton largely come from it being the largest supplier of quality cotton, but it remains to be seen whether the US will be able to retain its market share since the quality of 2017 crop is still unknown.
