Cotton futures on ICE dropped to a 9-month low of around 100 USd/Lbs, the lowest since September last year and down 35% from its 11-year high of $158 hit in May, as growing recessionary fears raised prospects of lower demand. As major global central banks are raising rates to fight inflation, the slowdown in economic activity and consumption is set to impact the recession sensitive commodity. Further weighing on the prices was a better crop outlook as favorable weather conditions boosted hopes of solid yields in top growing regions. Meanwhile, the USDA slashed the world demand projections by 450 thousand bales in its June report, due to lower consumption from Mexico and Bangladesh, the two major producers of clothing. While on the supply side, it revised higher its production estimates to 121.2 million bales in the next harvest season.
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Historically, Cotton reached an all time high of 227 in March of 2011. Cotton - data, forecasts, historical chart - was last updated on June of 2022.
Cotton is expected to trade at 107.24 USd/Lbs by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 118.38 in 12 months time.