DTN Cotton Close: Sharply Lower on Data

©Debra L Ferguson Stock Images

The cotton market flirted with limit-down prices Tuesday amid USDA’s monthly supply-demand report. In the data, the tabulators lowered the U.S. production, idled exports, but lowered ending stocks. However, in the world categories, global production increased, consumption decreased and global carryout jumped some 450,000 bales.

Tuesday afternoon, USDA will issue its delayed crop harvest/condition report. Last week the crop was 13% gathered and the good-to-excellent conditions were 62%.

Traders are also anticipating Friday’s export-sales data. It was widely thought that U.S. exports would be increased in Tuesday’s government crop update given the recent standout sales. However, they were left unchanged, and the market took that a slight negative.

At risk are the overloaded speculative longs. Last week in the CFTC update, the managed-money funds were listed as net-long some 96,000-contracts. At that time, we indicated that the most recent buyers were under water in their positions. Of course, after Tuesday, they must be really suffering, which might further exacerbate the current selloff.

For Tuesday, December settled at 106.38 cents, down 3.41 cents, March ended at 104.10 cents, minus 3.14 cents and December 2022 ended at 89.17 cents, 0.59 cent higher; estimated volume was 43,242 contracts.

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