May cotton is trading down 0.03 cents early Wednesday, but is still near its highest spot prices in over two years as cotton continues to benefit from stronger world demand in 2021, active cotton exports and also strong demand for plant oils. Traders await the next report of weekly export sales on Thursday morning.
Also in cotton’s favor in the new-crop season, USDA estimates U.S. plantings will be limited to 12.0 million acres and U.S. ending stocks are expected to decline from 4.3 million bales in the current season to 3.8 million bales in 2021-22. December cotton is also slightly lower early Wednesday, trading near 86.88 cents.
Early Wednesday, the ICE exchange reported eight new delivery notices for March cotton, bringing total deliveries to 41. As on Tuesday, all eight deliveries were by Term Commodities and were stopped by Wells Fargo.
Technically, the trend remains firmly up in May cotton with resistance likely at $1.00. 91% of noncommercial positions are on the long side of the market, a dangerous imbalance that is not being challenged yet.
In outside markets, the March U.S. Dollar Index is up 0.12, while Dow Jones Industrial Average futures are down 67 points in early trading. April crude oil is up 76 cents and April gold is down $17.30. May soybean oil is up 0.34 cent.
In cash online trading, The Seam showed 1,874 bales sold Tuesday at an average price of 73.69 cents. Average loan value was 43.60 cents and 46,368 bales were offered.
The ICE daily stocks report showed certified stocks unchanged at 100,326 as of February 23.
The Cotlook A Index of world values for Feb. 22 was up 0.20 cents at 95.60 cents, putting the premium over the May futures settlement at 3.09 cents.