DTN Cotton Open: Market Higher, Awaits Data

Photo: Larry Stalcup, AgFax Media

The cotton market is markedly higher Wednesday morning as traders are anticipating supportive news for Thursday’s handful of reports. Initially USDA will issue its weekly export sales report and traders will also see the latest CPI (inflation data).

Current season sales are running ahead of USDA’s target, so it’s hoped additional strength will be seen. Traders are also anticipating a higher inflation pace (4.7%) for the month of May. The data for April was 4.2%, which was the highest in two years. Both of those releases are out at 8:30 a.m. EDT.

The more meaningful report will be the June Crop Report at 12:00 p.m. EDT. Traders are looking for U.S. exports around 14.76 million bales (14.00-15.50 range) versus 14.70 million bales in May.

Domestic ending stocks are expected at 2.99 million bales (range 2.03-4.05 million), down 0.12 million bales from the May report. World ending stocks are expected at 90.64 million bales (range 88.00-92.03 million), down 0.35 million from May’s 90.90 report.

The 6-10 day forecast calls for below normal precipitation in West Texas, while conditions turn towards normal in the 8-14 day.

Options on the July contract will expire this Friday at the settlement. The contract will enter its delivery June 23.

For Wednesday, close-in support for December cotton is 85.78 cents and 85.20 cents, while resistance may be found at 87.15 cents and 88.93 cents. The estimated morning volume is 9,465 contracts.

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