Cotton in demand?
|Cotton is a member of the Soft Commodities sector and is one of the more volatile commodities in its group. Weather conditions in producing countries, along with supply and demand are the main drivers behind the volatility. Since the coronavirus pandemic, demand has evaporated as factories and outlets cease to work and the ongoing feud between the U.S. and China isn't helping matters for the lightweight fibre.
As the US Dollar continues to show signs of further weakening, we could expect to see commodities such as Cotton consolidate around these current levels or perhaps rise for the medium term. As of today, the Cotton index is currently trading at 63.84 per pound.
According to last week's Commitment of Traders (COT) data. Large speculators reduced their bullish exposure from the previous week by -4,797 contracts totalling 42,055 contracts, short positions totalled 18,340 contracts a reduction of -668 contracts from the week starting on the 21 July ‘20.
Commercial hedgers are currently short 102,907 contracts a change of -4,653 contracts from the week prior, 1,309 contracts were added to their bullish exposure this week totalling 25,386 contracts.
Non-Reportables (aka small participants) are holding 15,703 contracts long and 3,460 short, an increase of 363 contracts from the week prior.
What happens at (1) could pave the way for the short-medium term.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.