DTN Cotton Open: Higher on Weather, Data

Irrigation pivot in cotton field. Photo: Kay Ledbetter, Texas AgriLife Extension

The cotton market is higher Thursday morning as it sees no relief in sight for the parched cotton fields of Texas. Hot, dry conditions, with soaring triple-digit temperatures, will persist across the Lone Star state for the next seven-to-ten days. Moreover, longer-term forecasts show little change.

Thursday marks the end of spot July cotton. There were no deliveries today, and the 2019/2002 season ends on July 31st.

Friday, USDA will issue its July Crop Report at noon EDT. We will publish last minute estimates Friday morning, but expectations call for a small U.S. crop given USDA’s reduced acres data of last week.

Thursday morning, USDA issued its weekly export sales report. Although sales were not necessarily dynamic, shipments were very strong. A summary follows:

Net sales of 43,800 RB for 2019/2020 were down 35 percent from the previous week and 74 percent from the prior 4-week average. Increases primarily for China (22,000 RB), Malaysia (8,800 RB, switched from China), Vietnam (8,700 RB, including 2,400 RB switched from Japan, 1,400 RB switched from South Korea, and decreases of 1,300 RB), Turkey (6,400 RB), and Indonesia (1,400 RB, including 100 RB switched from Japan), were offset by reductions primarily for Japan (2,200 RB), South Korea (1,400 RB), and Pakistan (1,400 RB).

For 2020/2021, net sales of 6,700 RB were reported for Turkey (5,400 RB) and Vietnam (1,300 RB). Exports of 329,300 RB were up 19 percent from the previous week and 7 percent from the prior 4-week average. Exports were primarily to China (112,400 RB), Vietnam (61,100 RB), Turkey (47,600 RB), Pakistan (36,200 RB), and Bangladesh (20,200 RB).

Net sales of Pima totaling 2,800 RB were down 39 percent from the previous week and 34 percent from the prior 4-week average. Increases were for China (1,300 RB), Pakistan (1,000 RB), India (400 RB), and Turkey (100 RB). For 2020/2021, total net sales of 3,600 RB were for El Salvador.

Exports of 7,300 RB were up 65 percent from the previous week, but down 16 percent from the prior 4-week average. The destinations were primarily to China (3,000 RB), Pakistan (3,000 RB), Vietnam (500 RB), India (300 RB), and Bangladesh (300 RB).

Thursday morning, the Labor Department issued its latest jobless claims data. Although expectations called for 1.39 million unemployment applications, today the number was 1.13 million. That was 99,000 fewer claims than last week. Hopefully this report is a sign the U.S. economy is coming back to life.

For Thursday, support for December cotton lies at 63.40 cents and 62.60 cents, with close-in resistance at 65.80 cents. Current volume stands at 5,325 contracts.

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