The cotton market peeled lower late Thursday and into the night as long liquidation is occurring. The market posted a super 11-month peak on February 25 and has been struggling for air ever since.
Friday morning the Labor Department 379,000 non-farm jobs were created in February. This may be attributed to COVID infections falling and more of the country being inoculated. Expectations were from 185,000 to 210,000 jobs would be added. The number immediately jumped short-term yields above the previous 1.50% to 1.62%. That move jolted the U.S. dollar higher.
From Thursday’s weekly export sales data, cumulative sales for 2020/21 have reached 13.578 million bales, down from 13.347 million at the same time last year. However, the current number is the second highest since the 2010/11 season. The five-year average is 11.277 million. Cumulative sales have reached 95% of the USDA’s forecast for the marketing year versus a five-year average of 85%.
Next Tuesday, USDA will issue its March Crop Report. Early industry estimates have U.S. ending stocks being 4.06 million bales (ranging 3.90-4.30 million), down from 4.30 million in February. World ending stocks are expected to come in at 95.50 million bales, (range 94.81-96.00 million), down from 95.74 million in February. The report is out at 12:00 p.m. EST.
For Friday, support for May cotton is 86.25 cents and 85.75 cents, with resistance at 89.15 cents and 89.75 cents. The estimated morning volume is 12,920 contracts.