DTN Cotton Open: Buoyed by Better Exports-Sales

cotton
©Debra L Ferguson Stock Images

The cotton market remains in a sideways-to-up trading pattern as the most recent news has been favorable. Earlier this week, USDA reported another sizable reduction in the U.S. crop, causing domestic ending stocks to fall to 5.5 million bales. While that is a substantial reduction from the previous 6.10 million, the current amount remains up from last year’s 4.85 million, and the 4.20 million bale carry from two years ago.

Thursday’s friendly news was the weekly sales and exports report. Last week’s current year sales totaled 164,000, which was the slowest in four weeks. However, Thursday’s numbers showed a marked improvement.

A summary of USDA data is as follows:

Net sales of 277,100 bales for 2019/2020 were up 69% from the previous week and 9% from the prior 4-week average. Increases were primarily for Turkey (80,100), Pakistan (61,300), Vietnam (52,300), Bangladesh (19,200), and Malaysia (17,600). There were offsets from Thailand (1,500). For 2020/2021, net sales were 6,600 bales, for Vietnam (2,600), Mexico (2,200), and Indonesia (1,800).

Exports of 186,300 bales were up 12% from the previous week and 21% from the prior 4-week average. Exports were primarily to Vietnam (37,300), China (28,500), Pakistan (28,000), Mexico (20,900), and Bangladesh (15,100).

Net sales of Pima totaling 5,800 bales were up 30% from the previous week, but down 29% from the prior 4-week average. Increases were primarily for India (4,400), South Korea (600), Japan (300), Bangladesh (200), and Guatemala (200). For 2020/2021, total net sales of 1,300 RB were for China.

Exports of 8,000 bales were up 12% from the previous week and 17% from the prior 4-week average. The primary destinations were India (2,600), El Salvador (1,200), Pakistan (1,200), Bangladesh (1,000), and Vietnam (900).

Traders will be focused on Sunday’s tariff decision by President Trump. December 15 was a pre-ordained date for additional import duties to be levied on China.

For Thursday, close in support for March cotton is 65.10 cents and 64.40 cents, with resistance at 63.20 cents and 66.80 cents. Overnight estimated volume is 3,385 contracts.

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