DTN Cotton Open: Market Higher, Awaits Data

Overnight foreign buying dramatically lifted cotton with triple-digit gains. Traders continue to fear a smaller cotton crop across the Northern Hemisphere. The market is wanting some sort of damage confirmation for the Indian and Chinese crops. India was recently hit by a massive Cyclone, while China saw massive floods along the Yangtze River and is currently experiencing detrimental rains in the Northern Plains region.

Tuesday at Noon EDT USDA will update its domestic and global supply-demand estimates. The average trade expectation for 2021/2022 production is 18.37 million bales, which would be lower than the September report. Domestic exports are expected at 15.61 million bales versus 15.50 million bales in September.

Ending stocks are anticipated to be 3.44 million bales, down from September’s 3.70 million bales. World production is expected to be 119.22 million bales, down from 119.59 million bales in September, while world ending stocks are expected at 86.50 million bales versus 86.68 million bales.

Tuesday afternoon at 4 p.m. EDT, USDA will issue its delayed crop harvest and condition numbers. In recent weeks USDA improved the 2021 crop to 62% good/excellent, with some 13% harvested versus the five-year average of 19% gathered.

For Tuesday, close-in support for December cotton is 107.40 cents and 106.50 cents, while resistance stands at 113.00 cents and 116.50 cents. The estimated morning volume is 13,694 contracts.

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