Cotton prices rebound slightly due to a weaker US dollar and higher oil prices, with the market focusing on the USDA planting report.
- Intercontinental Exchange cotton futures rose moderately on Monday, with the main December contract up 1.1% to 77.19 cents. The rebound in crude oil prices and the U.S. dollar weakening for the third consecutive trading day jointly boosted cotton prices. The weaker dollar makes dollar-denominated commodities more attractive to buyers holding other currencies.
- The mutual strikes between the U.S. and Iran highlight the fragility of the temporary peace agreement. Rising oil prices are pushing up the cost of polyester fibers, indirectly enhancing the demand outlook for cotton as a substitute. However, current weather conditions have a neutral to slightly negative impact on cotton.
- The market focus is now shifting to the planting acreage and inventory report to be released by the U.S. Department of Agriculture on Tuesday. Institutions expect the report may show a slight increase in cotton planting acreage but not a significant breakthrough. Additionally, institutions estimate global cotton production for the 2026/27 season will be about 119.27 million bales.
- Position data shows that as of the week ended June 23, Intercontinental Exchange cotton speculators increased their net long positions by 7,247 contracts to 58,252 contracts, signaling a moderately optimistic attitude towards future cotton prices. However, the indirect impact of grain market pullbacks and heatwave forecasts in the U.S. Midwest still needs to be observed.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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