Market Observation: US Department Of Agriculture ICE Report Shows An Increase In Cotton Export Sales

According to the data released by ICE, as of April 24, the inventory of ICE deliverable No. 2 cotton contracts had increased to 178147 bales, compared with 176977 bales on the previous trading day, an increase of 5415 lots compared with the previous week.

The US Department of Commerce reported that the US gross domestic product (GDP) grew at an annual rate of 1.6% from January to March, lower than the 2.4% expected by economists surveyed.

The main stock indexes reacted negatively to the announcement of US gross domestic product (GDP), but this week ended slightly higher than last week.

The number of new claims for unemployment benefits in the United States unexpectedly declined last week. As of April 20, the number of new claims for unemployment benefits in the week was 207000, the lowest since February 17, 2024. The market had expected 215000, indicating that the labor market is still tight.

The US personal consumption expenditure (PCE) price index rose 0.3% month on month in March, up 2.7% year on year. Economists interviewed expected a 0.3% month on month increase and a 2.6% year-on-year increase. In March, the core PCE price index rose 0.3% month on month, in line with expectations, 2.8% year-on-year, higher than the 2.7% expected by economists.

Consumer price inflation in March, announced earlier this month, was higher than expected, raising concerns that price pressure will take longer to fall close to the Federal Reserve's 2% target.

After the inflation data was released, according to the FedWatch tool of CME, the US interest rate futures market believed that the possibility of the Federal Reserve cutting interest rates at the September meeting was 58%, lower than 68% a week ago. The probability of interest rate reduction in December is more than 80%.

Despite the rise in mortgage interest rates, sales of new homes in the United States increased 8.8% in March compared with February.

Durable goods orders in the United States rose 2.6% in March, the second consecutive month of growth.

On April 22, the average gasoline price rose to $3.668 per gallon, up $0.040 from the previous week. The average diesel price fell 0.023 dollars to 3.992 dollars per gallon.

The weekly export sales report released by the United States Department of Agriculture (USDA) shows that as of April 18, the net export sales of American cotton in the current year had increased by 177100 bales, 21% more than the previous week, and 72% more than the average of the previous four weeks. China is the largest buyer, with a net increase of 94700 bales in export sales to China, followed by Pakistan (26800 bales) and Vietnam (14200 bales). In the next year, the net export sales of American cotton increased by 65700 bales, higher than the average, including 22000 bales for China, 12100 bales for Honduras and 11000 bales for Turkey. 261700 bales of American cotton were shipped for export, a decrease of 2% over the previous week and an average decrease of 18% over the previous four weeks, including 99800 bales shipped for export to China. The net increase of Pima cotton sales was 12500 bales, and the export shipment was 10100 bales.

Macro data will gather this week, and a large amount of data will be released next week.

Traders will focus on US export sales report and crop growth report.

The Federal Open Market Committee (FOMC) will meet from April 30 to May 1. The results of the meeting expected to be released by the market on May 1 (Wednesday) show that interest rates remain unchanged.

Nationwide, the planting rate of American cotton is currently 11%, and that of Texas is 16%. The weather in South Texas is favorable on the whole, which helps the crop progress in the whole region. Next week will usher in timely rainfall, continuing the good start of this season.