DTN Cotton Open: Lower, Awaits Exports-Sales

Cotton module on conveyor belt at Mill Creek Gin. ©Debra L Ferguson

After a huge upside surge Tuesday, the cotton market is slightly lower. Traders are waiting to see if Thursday’s weekly export sales will continue to stoke the bullish fire just lit by USDA. Tuesday the agency cut 2020 production and increased exports, resulting in lower ending stocks. The bullish jump took spot March to its highest price level since September 2018.

The government adjustments now have domestic carryout at 4.20 million bales, their lowest level since the 2017/18 season. The stocks-to-use ratio has fallen to 26%, down from 41% in 2019/20, and the lowest since that aforementioned season. World ending stocks came in at 96.32 million bales, which was below traders’ expectations. As they stand, world ending stocks remain the second highest since 2014/15.

Thursday, USDA will issue its weekly export sales report. Traders are definitely needing to see improved numbers to enhance the supply-demand data USDA just published. That report is scheduled for 8:30 a.m. EST.

This Week’s Calendar:

  • Wednesday: DOE Energy Inventories
  • Thursday: Weekly Exports/Sales at 8:30 a.m. EST
  • Friday: Retail Sales at 8:30 a.m. EST

For Wednesday, close-in support for March cotton is 80.50 cents and 79.90 cents, with resistance at 82.50 cents and 83.00 cents. The current estimated volume is 8,765 contracts.

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