December cotton has been on both sides of Wednesday’s close, as it deciphers the effects of better weekly sales and exports and a weaker dollar. Of course, we use the term “better exports” lightly as net sales, although higher than last week, still didn’t break triple-digit levels.
USDA’s weekly export sales summary showed weekly net sales for 2018/2019 were 97,800 bales. That was up 20% from the previous week, but down 24% from the prior 4-week average. Top buyers included Vietnam (25,500), Mexico (18,500), Pakistan (15,300), Bangladesh (13,100), and Thailand (8,700).
For 2019/2020, net sales were 32,900, reported for Thailand (23,300), Mexico (8,400), Guatemala (800), and China (400). Weekly exports totaled 148,900 bales, up 10% from the previous week, but down 7% from the prior 4-week average. The main destinations included Vietnam (43,700), Indonesia (19,200), China (16,200), Mexico (16,100), and Pakistan (8,800).
Net sales of Pima totaling 3,300 RB for 2018/2019 were down 42% from the previous week and 61% from the prior 4-week average. Top buyers were Peru (1,800), India (800), China (600), and Vietnam (300). Weekly Exports of 8,700 RB were up noticeably from the previous week and 50% from the prior 4-week average. There had been talk of larger cancellations for top buyers, but those didn’t materialize, at least this week.
The cotton market continues to “gather itself” after Tuesday’s calamitous spill. Speculators remain long the market, but are becoming wary of their position. As the harvest season is now upon the market, they may have less incentive to remain bullish. Thus, another leg-down in prices into the fall is possible.