Cotton is slightly lower Wednesday as traders await the next market-moving news events. One is Thursday’s weekly export sales at 8:30 a.m. EDT. Last week saw sales of nearly 450,000 bales, with China as the top buyer of 261,000 bales.
However, overnight China reported weaker retail sales of 2.5%. Expectations were for 7%. The government blamed summer floods and COVID lockdowns as the primary reasons for the weaker business number.
Word is India’s cotton production may decline to 28.3 million (480-pound) bales due to waning monsoons in July and August. Gujarat (India’s largest-producing state) was almost 30% below the long-term average as of mid-September.
In addition, Indian officials said there is an emerging pink bollworm problem, which may restrict yields as well. Last Friday’s WASDE showed Indian production at 28.50 million bales for 2021/22, down from 29.00 million estimated in August but up from 28.30 million in 2020/21.
Remnants of Tropical Storm Nicholas continue to pound the lower U.S. Delta with copious amounts of rain. The 1 to 5-day forecast calls for heavy rainfall across Louisiana, Mississippi, and Alabama. Moreover, the 6 to 10 and 8 to 14-day outlooks suggest above normal temperatures across the cotton belt, with below normal precipitation in West Texas.
For Wednesday, close-in support for December cotton is 92.40 cents and 92.00 cents, while resistance stands at 94.00 cents and 94.50 cents. The estimated morning volume is 2,420 contracts.