Cotton Drops Toward Three-Month Low
Cotton futures fell below 80 cents per pound, approaching a three-month low as rising harvest supplies weighed on prices. The US harvest continues to advance at an accelerating pace, with 52% of the crop havested by the week ending October 26th compared with the five-year average of 45%. Peak harvest season can weigh on prices as new supplies enter the market. Seasonal supply pressure is compounded by intensifying export competition with Brazil, the world’s leading cotton exporter, which is expected to ship around 3.4 million tonnes, according to Anea, compared with the USDA’s US export forecast of 2.69 million tonnes. Meanwhile, progress in US—China trade talks has yet to deliver clear tariff relief, prompting Chinese buyers to scale back foreign purchases, reflected in a drop in China’s cotton imports of 42.6% year-on-year in September. In contrast, India is expected to extend duty-free cotton imports through December amid tight domestic supplies, supporting some demand.
Cotton futures fell below 80 cents per pound, approaching a three-month low as rising harvest supplies weighed on prices. The US harvest continues to advance at an accelerating pace, with 52% of the crop havested by the week ending October 26th compared with the five-year average of 45%. Peak harvest season can weigh on prices as new supplies enter the market. Seasonal supply pressure is compounded by intensifying export competition with Brazil, the world’s leading cotton exporter, which is expected to ship around 3.4 million tonnes, according to Anea, compared with the USDA’s US export forecast of 2.69 million tonnes.
Meanwhile, progress in US—China trade talks has yet to deliver clear tariff relief, prompting Chinese buyers to scale back foreign purchases, reflected in a drop in China’s cotton imports of 42.6% year-on-year in September. In contrast, India is expected to extend duty-free cotton imports through December amid tight domestic supplies, supporting some demand.