U.S. Cotton Futures Advance Despite USDA Report Signaling Higher 2024 Acreage
AI Market Summary
USDA\u0027s June acreage report lifted 2024 cotton plantings to 9.85M acres, above expectations, a supply-negative input. However, ICE cotton futures gained as crop conditions deteriorated: boll set is low and the good/excellent rating fell to 48%, with Texas seeing a sharp downgrade. With a slightly firmer dollar and weaker oil failing to pressure prices, the market appears to be repricing near-term weather risk and tighter spot availability.
Impact level
● Medium
Affected assets
NCCOCOTTON2USD/USDT+0.44%
AI Insight · NCCOCOTTON2USD/USDTAI Insight
● Neutral
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On Tuesday, June 25, U.S. cotton futures recorded gains across the board despite a bearish USDA planted acreage report. According to the USDA's June data, 2024 cotton plantings are estimated at 9.85 million acres, surpassing the market expectation of 9.60 million and the previous March estimate. ICE cotton contracts closed between 22 and 43 points higher, with the benchmark July contract settling at 72.22 cents per pound. While the acreage increase initially posed a headwind, the market focused on declining crop quality. National good-to-excellent ratings fell to 48%, a 5% weekly decline, while Texas conditions plummeted by 14 points. Traders are increasingly pricing in seasonal weather risks and tightening spot supplies, overshadowing a stronger U.S. dollar and lower crude oil prices.
