The cotton market is slightly higher Thursday as its sister markets (corn, beans, and wheat) collectively saw positive quarterly stocks data Wednesday and traded sharply higher. Year-over year saw corn inventories off 10%, while soybeans were slashed some 42%. Their positive reaction finessed cotton prices higher to some degree.
This morning USDA released supportive sales-exports numbers. The government summary follows: Net sales of 233,800 RB for 2020/2021 were up noticeably from the previous week and up 7 percent from the prior 4-week average.
Increases were primarily for Turkey (62,500 RB), China (55,700 RB), Vietnam (41,100 RB), Mexico (24,300 RB), and Indonesia (13,400 RB, including decreases of 4,300 RB). For 2021/2022, net sales of 20,600 RB were for Mexico (16,300 RB) and Indonesia (4,300 RB). Exports of 218,200 RB were down 23 percent from the previous week and 10 percent from the prior 4-week average.
Exports were primarily to China (105,400 RB), Vietnam (49,400 RB), Indonesia (14,700 RB), Mexico (14,300 RB), and Pakistan (8,800 RB). Net sales of Pima totaling 19,500 RB were up 5 percent from the previous week, but down 4 percent from the prior 4-week average.
Increases were primarily for India (7,700 RB, including decreases of 100 RB), China (3,900 RB), Bangladesh (2,200 RB), Peru (2,200 RB), and Hong Kong (1,500 RB). Exports of 10,800 RB were down 17 percent from the previous week and 18 percent from the prior 4-week average. The primary destinations were India (3,600 RB), China (3,200 RB), El Salvador (1,800 RB), Pakistan (900 RB), and Turkey (700 RB).
Thursday marks the official start of the 2020 harvest. Historically, the bulk of the U.S. crop is gathered across the Oct-Nov-Dec Window. To that end, the 6-10 day weather outlook has Texas with above normal temperatures, while the Delta and the Southeast will see normal temperatures. The entirety of the cotton belt should see below normal rainfall, which ought to enhance harvesting activities.
Thursday’s close-in support for December Cotton is 65.60 cents and 64.85 cents, with overhead resistance at 66.60 cents and 67.00 cents. The current estimated volume is 4,322 contracts.