DTN Cotton Open: Lower on Friday Squaring

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    The cotton market is lower Friday as end-of-the week profit-taking may be emerging. Thus far this month, spot March is up some 400 points, so a hint of selling is technically permissible. In conjunction the cotton market sees a higher U.S. dollar, but lower grains, energies and stock markets.

    USDA reported decent business for last week in Friday’s export sales report. Although sales were slightly off, shipments were demonstratively higher. An official website summary follows:

    Net sales of 292,400 RB for 2020/2021 were down 10 percent from the previous week and 1 percent from the prior 4-week average. Increases primarily for Vietnam (123,700 RB, including 200 RB switched from Japan), Pakistan (66,100 RB, including decreases of 200 RB), Turkey (46,000 RB), Bangladesh (37,600 RB), and Indonesia (13,400 RB, including 200 RB switched from Japan and decreases of 2,800 RB), were offset by reductions primarily for China (22,300 RB).

    For 2021/2022, net sales of 39,500 RB were primarily for Bangladesh (18,000 RB), Pakistan (11,000 RB), Mexico (6,000 RB), and Turkey (4,4000 RB). Exports of 322,400 RB were up 17 percent from the previous week and 18 percent from the prior 4-week average. Exports were primarily to China (137,100 RB), Pakistan (54,800 RB), Vietnam (39,400 RB), Mexico (21,000 RB), and Turkey (13,300 RB).

    Net sales of Pima totaling 23,800 RB were down 34 percent from the previous week, but up 8 percent from the prior 4-week average. Increases were primarily for India (9,300 RB, including 400 RB switched from Pakistan), Vietnam (4,400 RB), Peru (1,900 RB), United Arab Emirates (1,900 RB), and Turkey (1,600 RB).

    Exports of 8,400 RB were down 19 percent from the previous week and 36 percent from the prior 4-week average. The destinations were primarily to India (2,500 RB), Bangladesh (2,200 RB), Honduras (1,200 RB), Pakistan (1,000 RB), and Peru (900 RB).

    Technically the cotton market is trading within the confines of a well-defined bullish channel pattern. Speculators are stoutly net-long and continue to add positions on price breaks. Friday afternoon, the CFTC will issue its commitment-of-traders information indicating how the forces of speculators and hedgers are aligned.

    For Friday, close-in support for March cotton is 81.40 cents and 80.80 cents with resistance at 83.10 cents and 83.75 cents. The current estimated volume is 16,804 contracts.

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