The cotton market was lower Wednesday as volume was narrow. Traders are wanting additional fundamental news before taking on additional risk-on buying. The biggest report yet to be released is the June 30 acres report.
In March, USDA estimated all cotton planted area for 2021 at 12.0 million acres. However, afterwards corn and soybeans ran to nearly eight-year highs, which siphoned acres out of cotton. Additionally, the harshness of spring weather and the recent Delta floods have curtailed other areas as well.
Thursday morning, USDA will issue its weekly export sales. The U.S. needs to ship about 295,000 bales per week to meet the government’s recently revised exports projection.
On Friday afternoon the CFTC will update its Commitment of Traders data. This report offers a weekly, but delayed, look at the reportable positions carried by certain speculators and hedgers. Last week’s number indicated managed-money funds had bought some 2,700 contracts, increasing their net long position to 37,500 plus/minus contracts.
The Federal Reserve announced Wednesday that it was taking no action on interest rates. The central bank sharply raised its expectations for inflation this year and brought forward the time frame on when it will next raise interest rates. However, the central bank gave no indication as to when it will begin cutting back on its aggressive bond-buying program.
Wednesday, July closed at 85.33 cents, up 0.05 cent, December settled at 85.95 cents, down 0.85 cent and March 2022 ended at 85.86 cents, 0.73 cent lower; estimated volume was 26,127 contracts.