The market finished Friday’s session slightly lower as weakness in the Chicago grains and speculative profit taking in cotton were evident. The cotton market posted a contract high settlement Thursday after USDA issued very supportive numbers. Bottomline domestic carryout was cut below 3.0 million bales and global stocks were whacked below 90 million.
Weather-wise, the one- to five-day forecast calls for light to zero rain for West Texas, but heavier amounts are expected to fall across the Delta, where it is not wanted, and over into the Southeast, where it definitely is needed. For much of the production belt, the six- to 10-day forecast calls for below normal precipitation, while the eight- to 14-day outlook shows normal to above normal across most of the region, except for West Texas, which looks to be dry.
The U.S. dollar was higher Friday as currency traders look towards next week’s Federal Reserve meeting. Both the Fed and Treasury officials have criticized this latest rise with inflation as transitory or momentary. Of course, that remains to be seen.
July cotton options will expire Friday, and it will be interesting to see what effect that event will have on spot July’s open interest. The contract enters delivery on June 24.
For the week, December cotton was up 2.04 cents, plus 4.60 cents on the month and up 14.22 cents on the year.
Friday, July closed at 87.00 cents, down 0.36 cent, December settled at 87.92 cents, down 0.29 cent, and March 2022 ended at 87.73 cents, down 0.34 cent; estimated volume was 53,321 contracts.