In the face of tremendous bearish odds, the cotton market is attempting to stay positive Friday. March jobs data was released Friday morning and the results were staggering.
For the month of March, some 700,000 jobs were lost, and such losses may just be the beginning. Interestingly, the Dow is down a mere 100 points. For cotton that could mean a big reduction in domestic demand for apparel.
Coming into Friday morning, cotton stands some 150 points down on the week, but what a wild week of trading it has been. Essentially, the market traded limit-down one day, and virtually limit-up the next. It was a week that saw positive export sales, when reduced or negative sales were expected.
At any rate, cumulative sales stands at 15.725 million bales, which is the largest number of sales since 2008. U.S. sales have now reached 99.70% of USDA’s forecast, compared to the 5-year average of 93% sold.
The COVID-19 virus will continue to dominate the headlines for the balance of the month, and possibly beyond. For cotton, there remains the possibility that some sale cancellations and/or re-negotiations may take place. This will be especially true if foreign mills continue to shutter their factories.
For Friday, support for May cotton is 49.50 cents and 48.40 cents, with resistance at 51.50 cents and 53.30 cents. Overnight estimated volume stands at 10, 595 contracts.