The market is doing better Thursday morning after Wednesday’s tedious decline. However, it is spending much of its time seesawing from positive to negative. July cotton is down 0.78 cent on the week. Frankly, the market needs of some sort of new bullish catalyst to carry it higher, but other than a trade deal with China, we see no major event unfolding.
The 2019 crop is being planted at something of a normal pace. However, we understand coastal Texas is running weeks behind. A flow of spring storms and blowing winds have forced many area producers to replant. This delay leaves that Valley cotton susceptible to late-season storms. In fact, Hurricane Harvey comes to mind.
USDA reported improved business for last week. The report summarizes as follows: Net sales of 239,000 bales for 2018-19 were up 10% from the previous week, but down 9% from the prior four-week average. Increases were reported for Turkey (88,400), India (74,600), Vietnam (28,500, including 700 bales switched from China), Indonesia (15,900)), and China (13,100).
Reductions were seen for Japan (1,700). For 2019-20, net sales were 48,900 bales. They were primarily for Vietnam (22,000) and China (17,600). Exports of 318,000 RB were down 7% from the previous week and 16% from the prior four-week average.
Exports were primarily to Vietnam (75,900), Pakistan (43,400), China (38,300), Turkey (38,000), and Bangladesh (26,200). Net sales of Pima totaling 10,500 bales were down 26% from the previous week and 54% from the prior four-week average.
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Increases were primarily for India (4,300), Hong Kong (2,200), Pakistan (1,400), and Peru (1,100). For 2019-20, total net sales of 1,300 bales were for India. Shipments were 11,000 bales, which was down 5% from the previous week and 24% from the prior four-week average.
Top destinations were China (4,300), Peru (1,500)), Turkey (1,300), India (1,300), and Pakistan (1,300).
Overall, the market will continue to monitor news from the trade talks and watch the strength of the dollar. For Thursday, close-in support for July cotton is 75.95 cents and 75.10 cents, with resistance at 77.66 cents and 78.77 cents.