The cotton market is higher Thursday morning as it, along with many other markets, is reflecting the positive comments from Fed Chairman Jerome Powell. Basically the Fed elected to maintain their policy of keeping interest rates at near zero by buying gobs of U.S. debt every month. The statement also indicated that tapering, the act of letting rates rise buy not buying U.S. debt, was off in the future.
USDA reported superficially gloomy numbers Thursday in its export sales, but the 2020/2021 season is also ending and there was bound to be some “rearranging” of export sales business. At any rate, the following is a summary from USDA’s website.
Net sales reductions of 1,200 RB for 2020/2021–a marketing-year low were–down noticeably from the previous week and from the prior 4-week average. Increases reported for Mexico (2,400 RB), Pakistan (900 RB), Peru (500 RB), South Korea (400 RB), and Egypt (100 RB), were more than offset by reductions for Indonesia (2,200 RB), Vietnam (2,000 RB), China (900 RB), and Japan (400 RB).
For 2021/2022, net sales of 192,200 RB primarily for Bangladesh (55,000 RB), Mexico (39,600 RB), Pakistan (33,700 RB), Vietnam (25,300 RB), and Turkey (14,300 RB), were offset by reductions for Guatemala (200 RB). Exports of 238,300 RB were down 3 percent from the previous week and 5 percent from the prior 4-week average. Exports were primarily to Turkey (54,200 RB), Pakistan (48,800 RB), Vietnam (29,300 RB), China (27,500 RB), and Indonesia (18,500 RB).
Net sales of Pima totaling 4,200 RB were up 22 percent from the previous week, but down 2 percent from the prior 4-week average. Increases were primarily for Peru (2,300 RB) and India (900 RB). For 2021/2022, net sales of 200 RB were reported for Thailand (100 RB) and Japan (100 RB). Exports of 9,300 RB were down 10 percent from the previous week and 14 percent from the prior 4-week average. The destinations were primarily to India (6,300 RB), Peru (1,500 RB), China (700 RB), Germany (400 RB), and Pakistan (200 RB).
Friday afternoon, the CFTC will issue its weekly commitment-of-traders report. For the past few weeks managed-money funds have been increasing their net long position, mimicking the increasing price trend of the cotton market. That data is out at 4 p.m. EDT.
For Thursday, close-in support for December cotton is 89.90 cents and 89.00 cents, while resistance stands at 91.00 cents and 91.50 cents. The estimated morning volume is 3,707 contracts.