DTN Cotton Open: Lower Start to the Day

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Cotton was unable to follow the lead of other ag markets, trading slightly lower early Thursday morning. Old-crop May was off 0.06 while new-crop December dipped 0.14.

General Comments:

It’s hard to get a good read on either minor (short-term) or secondary (intermediate-term) trends for old-crop May and new-crop December cotton contracts. Patterns would suggest both should be moving lower, though small sell-offs seem to uncover renewed buying interest. Early Thursday shows the market in general under light pressure following Wednesday’s failed rally.

Fundamentally, traders may be looking for slightly bearish weekly export sales and shipment data in Thursday’s report (for the week ending Thursday, March 15) given last week’s strengthening carry in the May-to-July futures spread.

Heading into this week’s update, marketing year total shipments of cotton is already running behind pace to meet USDA’s March demand projection of 14.8 million bales.

**USDA’s Export Sales report was postponed until Friday, March 23rd after this writing**

OUTSIDE MARKETS: The Dow Jones Industrial Average closed 44.96 points (0.2%) lower at 24,682.31, the NASDAQ Composite lost 19.02 points (0.3%) to 7,345.29, and the S&P 500 dipped 5.01 points (0.2%) to 2,711.93 Wednesday. DJIA futures were 147 points lower early Thursday morning.

Asian markets closed mixed with Japan’s Nikkei 225 up 211.02 points (1.0%), Hong Kong’s Hang Seng down 343.47 points (1.1%), and China’s Shanghai Composite losing 17.47 points (0.5%). European markets were trading lower with London’s FTSE 100 down 35.68 points (0.5%), Germany’s DAX losing 122.96 points (1.0%), and France’s CAC 40 off 51.92 points (1.0%).

The euro was 0.0009 lower at 1.2329 while the U.S. dollar index was unchanged at 89.70. June 30-year T-Bonds were 1 4/32 higher at 144’20 while April gold gained $7.20 to $1,328.70. Crude oil was $0.41 lower at $64.76 as Brent crude dropped $0.64 to $68.83.

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