The cotton market is trading lower Friday morning as some profit-taking is being seen from this week’s rally. Coming into Friday, the July market was up some 250 points, but given the shaky economic and political vibes, traders are quick to take their money.
Into next week, USDA will report on the planting progress for the 2021 crop on Monday at 4 p.m. EDT. Currently the pace of planting seems to be “normal”, but adverse weather in West Texas continues to hamper farmer’s efforts and crop stands.
Next Friday is the last trading day before spot May cotton enters its delivery. With tight stocks, some traders are expecting a benign notice period. May Cotton expires on May 7.
Friday afternoon at 3:30 p.m. EDT, the CFTC will report on the position status of speculators and hedgers. Given the recent rise in price has been accompanied by a decline in open interest, it’s thought to be an indication that certain commercials are buying back their short hedges.
Weather-wise, the 6-10 day forecast shows above normal rainfall for West Texas, but below-normal precipitation conditions return in the 8-14 day. The Southeast is looking at heavy rains Friday and Saturday.
For Friday, support for May cotton is 83.20 cents and 82.40 cents, with resistance at 85.10 cents and 86.20 cents. The estimated morning volume is 7,102 contracts.