The cotton market is lower again Thursday as fears increase over what human and economic toll the coronavirus will have. Overnight, global stock markets fell. Financial forecasters are trying to gauge the ultimate impact of the disease on the world economy but at this point, no one really has a clue.
It is that uncertainty that continues to take the world’s financial and commodities markets to the proverbial woodshed. To that end, the cotton market has lost some 550 points thus far this week.
USDA reported stout sales for last week. The summary is as follows:
Net sales of 214,600 bales for 2019/2020 were down 9% weekly and 32% from the prior 4-week average. Increases primarily for Vietnam (70,200 RB, including 1,100 RB switched from Bangladesh and decreases of 800 RB), China (39,600 RB, including decreases of 33,000 RB), Pakistan (35,800 RB, including decreases of 100 RB), Turkey (26,900 RB), and Indonesia (19,200 RB, including 700 RB switched from Japan and decreases of 1,400 RB), were offset by reductions primarily for Japan (4,600 RB) and Honduras (400 RB).
For 2020/2021, net sales of 198,900 RB were primarily for Vietnam (176,000 RB), Indonesia (9,700 RB), El Salvador (4,900 RB), Mexico (3,400 RB), and China (2,200 RB). Exports of 324,100 RB were down 14 percent from the previous week 15 percent from the prior 4-week average. Exports were primarily to Vietnam (88,100 RB), Pakistan (83,800 RB), China (32,900 RB), Turkey (25,400 RB), and Indonesia (14,700 RB).
Net sales of Pima totaling 28,100 RB were up noticeably from the previous week and from the prior 4-week average. Increases primarily for China (12,100 RB), India (6,100 RB), Hong Kong (2,600 RB), Egypt (2,100 RB), and Pakistan (2,000 RB), were offset by reductions for Switzerland (400 RB) and Japan (100 RB).
Exports of 18,200 RB were up 79 percent from the previous week and up noticeably from the prior 4-week average. The primary destinations were India (7,900 RB), Pakistan (2,900 RB), Bahrain (2,000 RB), Bangladesh (1,600 RB), and Vietnam (900 RB).
With virus fears on the rise, the cotton market has lost all sense of proportions, and will turn when the equity markets revived themselves.
For Thursday, support for May cotton is 63.50 cents and 63.72 cents, with resistance at 66.40 cents and 67.00 cents. Overnight estimated volume is 21,880.