DTN Cotton Open: Lower on Poor Sales, Outside Markets

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The cotton market is lower Thursday as USDA reported weaker export sales. In addition, commodities in general are suffering a small across-the-board sell-off with the Chicago grains leading the downward charge.

Here is the summary of USDA’s report: Net sales of 74,700 RB for 2020/2021 were down 33 percent from the previous week and 48 percent from the prior 4-week average. Increases primarily for Pakistan (36,500 RB), China (14,000 RB, including decreases of 14,100 RB), Peru (10,200 RB), Vietnam (7,100 RB, including 1,400 RB switched from Japan), and Bangladesh (4,600 RB), were offset by reductions for Singapore (4,600 RB) and Japan (1,100 RB).

For 2021/2022, net sales of 148,900 RB primarily for Pakistan (93,900 RB), Vietnam (26,300 RB), Peru (17,100 RB), Mexico (9,500 RB), and Guatemala (5,300 RB), were offset by reductions for China (7,900 RB). Exports of 206,000 RB were down 32 percent from the previous week and 34 percent from the prior 4-week average.

Exports were primarily to Vietnam (39,600 RB), China (38,800 RB), Pakistan (34,900 RB), Turkey (30,800 RB), and Bangladesh (16,600 RB). Net sales of Pima totaling 9,100 RB were up noticeably from the previous week and up 39 percent from the prior 4-week average. Increases were primarily for India (6,500 RB), Peru (900 RB), Bangladesh (600 RB), Turkey (600 RB), and China (400 RB).

Exports of 15,000 RB were up 25 percent from the previous week, but unchanged from the prior 4-week average. The destinations were primarily to India (7,700 RB), China (2,200 RB), Peru (1,800 RB), Turkey (1,100 RB), and Thailand (800 RB).

The Labor Department reported initial claims for unemployment insurance remained elevated last week as employers struggled to fill a record amount of job openings. First-time filings totaled 411,000 for the week ended June 19, a slight decrease from the previous total of 418,000 but higher than some analyst’s estimates of 380,000.

Friday at 3:30 p.m., CFTC will report on the status of market participants via its commitment-of-traders data. Last week’s information did show a slight increase in the net long position of the managed-money funds.

There were 39 notices issued against the spot July contract. The majority of those tenders were issued by Term Commodities. July cotton will remain in the delivery period until its expiration on July 8.

For Thursday, close-in support for December cotton is 85.80 cents and 84.75 cents, while resistance stands at 87.20 cents and 88.50 cents. The estimated morning volume is 4,280 contracts.

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