Futures Market - On January 7, ICE cotton futures retreated from earlier gains, influenced by falling oil prices and a stronger US dollar, with the most active March cotton futures contract down by 0.21 cents or 0.32%, settling at 64.85 cents per pound [1] - Speculative buying earlier in the day had initially supported cotton prices, with Price Futures Group's vice president suggesting a slight decline in US cotton production this year, which may provide some support for cotton prices later in the year [1] - The drop in oil prices is pressuring cotton prices as it makes polyester, a cotton substitute, relatively cheaper, thereby reducing demand for natural cotton [1] Export Data - Brazil's cotton exports in December reached 452,500 tons, boosted by demand from Asian countries, marking a 28.2% increase compared to the same period in 2024 [1] - Brazil is the world's largest cotton exporter, with production for the 2024/25 season expected to reach a record high of over 4 million tons [1] Inventory and Market Trends - As of January 6, ICE deliverable No. 2 cotton contract inventory stood at 11,510 bales, unchanged from the previous trading day [2] - The US dollar index has risen, while the S&P 500 index closed lower due to declines in financial stocks, although Nvidia and Alphabet helped lift the Nasdaq index as investors shifted towards AI-related stocks [2] - Oil prices have decreased for the second consecutive day as investors digest a deal by President Trump to import up to $2 billion worth of Venezuelan oil, which will increase supply for the world's largest oil consumer [2] Spot Market - On January 7, the Cotlook A Index was reported at 75.05 cents per pound, an increase of 35 points [3]

Group 1 - The cotton futures on the Intercontinental Exchange (ICE) closed lower on December 29, but remained close to the multi-week high reached the previous week, supported by short covering, a general rise in soft commodity markets, and increasing oil prices [1] - The ICE March cotton contract fell by 0.14 cents or 0.22%, settling at 64.35 cents per pound, after reaching its highest level since December 3 the previous Friday [1] - According to StoneX's risk management expert, there appears to be some short covering, but no specific factors are driving this rebound; it seems to be forming a new upward trend [1] Group 2 - As of December 16, speculators increased their net short positions in ICE cotton futures by 1,822 contracts to 60,573 contracts, indicating a cautiously optimistic sentiment [1] - International oil prices rose by over $1 on the same day, making cotton more attractive as a substitute for polyester fibers, which have become more expensive [1] - The overall soft commodity market saw small increases in cocoa, raw sugar, and coffee futures [2] Group 3 - The National Bureau of Statistics of China reported that the national cotton planting area for 2025 is projected to be 4,468.7 million mu, an increase of 2.113 million mu or 5.0% from the previous year; the yield is expected to be 148.6 kg/mu, up by 3.8 kg/mu or 2.6%; and the total production is forecasted at 6.641 million tons, an increase of 477,000 tons or 7.7% [2] - In the grain market, Chicago wheat prices fell on December 29 due to ample global wheat supply putting pressure on the market [3] - The Cotlook A Index on December 29 was reported at 74.50 cents per pound, an increase of 50 points [4]