Unable to recover its bullish composure, the cotton market is markedly lower Wednesday morning. The trade is in dire need of new bullish news as longtime friendly participants are becoming disenchanted with the market seemingly with each passing hour.
Given speculators carry a huge net long position, the market may be ripe for further downside correction. However, over the next few days several reports will be released which will hopefully repair the damage.
There were 10 delivery notices issued against spot March cotton. JP Morgan tendered 9 and Term offered 1 contract. They were stopped by Wells Fargo with 3 and SG Americas with 7 contracts. The March 2021 contract expires Tuesday, March 9.
Thursday, USDA will issue its weekly export sales report. Given the market’s fragile trading psyche, some strong numbers on both sides of the marketing equation need to appear. Last week saw sales of 248,000 for the 2020/2021 season, which was noticeably higher than the previous week. However, shipments were 6% lower with 292,000 bales exported.
For Thursday, support for May cotton is 89.20 cents and 88.62 cents, with resistance at 92.50 cents and 94.50 cents. The estimated morning volume is 6,068 contracts.