The cotton market is higher Wednesday as it anticipates a couple of USDA reports this week. Thursday the agency will release its weekly export sales report. Last week’s numbers were terrible, which initiated a sell-off ahead of the Easter holiday. Hopefully this week’s number will be improved, at least not showing any more cancellations. That report is due out at 8:30 a.m. EDT.
Then on Friday, USDA will issue its April Crop Report. Traders are looking for the 2020/2021 crop to be slightly lowered from 14.70 million to 14.57 million bales. Exports are expected to be 15.58, up from the previous 15.50. Domestic carryout is anticipated to be 4.11 million versus last month’s 4.20 million bales. World stocks are forecast at 94.43 compared to 94.59 million.
The issue of alleged forced labor continues to dog China and the West. Within China, western advocacy groups and retail companies such as H&M and Nike are facing a backlash after expressing concerns over forced labor in the region.
Thus, Chinese apparel brands are rallying on support for Xinjiang cotton. To date, the Biden Administration continues to maintain the Trump tariffs as a means to force China to come to terms with the labor situation.
For Wednesday, support for May cotton is 77.70 cents and 77.12 cents, with resistance at 80.88 cents and 81.50 cents. The estimated morning volume is 6,049 contracts.