The cotton market is trading slightly higher Thursday as USDA’s weekly export sales report showed strong new crop participation from China. Additionally, shipments were higher than last week’s data. The summary is as follows:
Net sales reductions of 68,500 RB for 2019/2020 were down noticeably from the previous week and from the prior 4-week average. Increases primarily for Egypt (5,800 RB switched from Turkey), Malaysia (1,400 RB switched from Indonesia), and China (600 RB), were more than offset by reductions primarily for Vietnam (61,300 RB), Turkey (5,900 RB), South Korea (3,500 RB), El Salvador (2,100 RB), and Indonesia (1,800 RB).
For 2020/2021, net sales of 130,800 RB were primarily for China (46,900 RB), Vietnam (22,100 RB), Indonesia (13,000 RB), Bangladesh (11,000 RB), and Pakistan (8,200 RB). Exports of 346,800 RB were up 8 percent from the previous week and 13 percent from the prior 4-week average. Exports were primarily to China (116,700 RB), Vietnam (103,300 RB), Pakistan (28,900 RB), Turkey (21,200 RB), and Bangladesh (18,500 RB).
No net sales of Pima for 2020/2021 were reported for the week. For 2020/2021, net sales of 13,300 RB were primarily for El Salvador (2,600 RB), India (2,500 RB), Austria (2,100 RB), Pakistan (2,100 RB), and Bangladesh (1,100 RB).
Exports of 16,300 RB were up noticeably from the previous week and from the prior 4-week average. The destinations were primarily to India (6,600 RB), China (5,200 RB), Djibouti (2,200 RB), Pakistan (1,000 RB), and Peru (900 RB).
Besides the stout fundamental trade numbers, traders remain mindful of the weather situation gripping much of the Cotton Belt. Currently, hot and dry conditions continue to weaken new crop production, putting upside pressure on the trade.
India is reporting a nagging infestation of pink bollworms in one of the larger production provinces. The last occurrence of this particular pest was in the 20017/2018 season, and widespread crop loss occurred. Reportedly, the insects attack the more mature plants, those seeded after June.
For Thursday, close-in support for December cotton lies at 63.75 cents and 63.25 cents, with resistance at 64.90 cents and 65.50 cents. The current estimated volume is 9,025 contracts.