DTN Cotton Open: Nervous Ahead of Supply, Demand Report

Photo by MSU Extension Service/Kevin Hudson

After posting a technical reversal of sorts Monday, the cotton market has traded both sides of unchanged overnight as it awaits Tuesday’s supply-demand data from USDA. The report will be released at noon EST Tuesday. Expectations are calling for a higher 2019 crop, lower exports, and in turn, higher ending stocks.

USDA reported Monday afternoon as of June 9, the 2019 crop stands at 75% planted, up 4% weekly. Texas is 67% complete, up 3% from last week, while Oklahoma is only 43% planted, and may actually lose some acreage due to the passing of several insurance dates. The weekly condition of the crop has it rated at 44% good/excellent and 15% poor very poor. The good/excellent rating was 2% lower weekly, while the poor/very poor category was up 2%.

Spot July Cotton continues to become more volatile. July options expire Friday and delivery starts Monday, June 24. That means that all producers with cotton on-call must fix by the preceding Friday. Such selling should keep that contract at bay.

For today, support for December cotton is 64.70 cents, with resistance at 66.40 cents and 67.10 cents. Estimated overnight volume is 11,900 contracts.

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