Cotton futures at ICE briefly hit a near 25-week low of $1.13 per pound before settling at $1.14 on Friday, pressured by prospects of weak consumption amid mounting concerns over a possible recession. As the central banks are raising rates to fight inflation, the slowdown in economic activity and consumption is unavoidable. Adding to woes, the outlook in top consumer China remains clouded by continued lockdowns. Meanwhile, the USDA’s demand projections were slashed by 450 thousand bales in its June report, due to lower consumption from Mexico and Bangladesh, which are the major producers of clothing. On the supply side, USDA revised higher its production estimates to 121.2 million bales in the next harvest season as output is expected to increase among major producers.
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 146.89 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 157.72 in 12 months time.