DTN Cotton Open: Struggles on Technicals, Poor Export

The cotton market is lower Thursday morning as it tries to gain some sort of footing after Tuesday’s horrific melt. On that day, the market was off well over 200 points as speculators piled on the trade. The market is in dire need of friendly news, but given its current negative environment, such will be hard to come by.

To that end, USDA published dismal export-sales data for last week. Highlights of the report show net sales of 53,400 RB for 2018/2019 were down 62 percent from the previous week, but up 26 percent from the prior 4-week average. Increases were primarily for Vietnam (36,100), Turkey (12,900), Indonesia (8,400), and India (6,700). Reductions were primarily for China (10,000), Japan (2,000), and Thailand (1,100).

For 2019/2020, net sales of 38,400 bales were primarily for Indonesia (9,200), Taiwan (8,700), Vietnam (6,500), South Korea (3,500), and Thailand (3,400). eekly Exports of 333,200 bales were down 2 percent from the previous week and 1 percent from the prior 4-week average. Exports were primarily to India (79,100), Vietnam (69,000), Turkey (59,100), Bangladesh (26,300), and China (17,900). Net sales of Pima totaling 700 RB resulting in increases primarily for China (2,200), Pakistan (600), and Austria (400).

Today at 11:00 a.m. CDT, USDA will publish its latest supply-demand data. Expectations are calling for slight reduction to the 2019 crop, from 22.0 million bales to 21.87 million. However, domestic carryout is anticipated a tad higher, from last month’s 6.40 million to the July estimate of 6.53 million bales.

Traders continue to monitor Tropical Storm Barry as it heads towards the New Orleans area. As of this writing, Barry has yet to evolve into a true hurricane. Nonetheless, it is expected to be a major rain event with some tropical force winds.

For today, support for December cotton stands at 63.07 cents, with resistance at 64.02 cents and 64.70 cents. Overnight volume is estimate at 3,600 contracts.

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