DTN Cotton Close: Ends Tumultuous Week Higher

    The cotton market had a wild session Friday, moving from limit-up bid to lower, and then slightly higher at the close. After a night of potential strong Chinese buying, ICE Futures were limit up, however, traders became disappointed with USDA’s weekly export-sales data.

    Those numbers show sharply lower sales and starkly lower shipments. Thus, profit taking emerged, sending prices down. However, given that the trend remains undeniably up, the market did regroup to finish higher.

    Cumulative sales have reached 51% of the USDA’s forecast for the 2021-22 marketing year versus a five-year average of 54%. China remains the top buyer, but the global shipping crisis is slowing sales and shipments. The Biden administration has asked the Port of Long Beach to work 24/7, but there are enough dock workers and truck drivers to supply such a schedule.

    Moreover, we understand California environmental regulations prohibit the use of tractor-trailer rigs older than 2011 models on the state’s highways.

    Next week, traders will focus on the crop’s harvest numbers on Monday and weekly export-sales on Thursday. This past Tuesday the 2021 crop was shown to be 20% harvested versus the five-year average of 26%. With that in mind, the weather outlook indicates heavy rainfall in central Texas, Oklahoma and parts of the Delta over the next one to five days. Longer-term, conditions lean towards drying out.

    For the week, December cotton finished about 3.27 cents lower but up 1.53 cents on the month and 33.63 cents higher on the year.

    For Friday, December settled at 107.33 cents, up 0.23 cent, March ended at 105.00 cents, plus 0.05 cent and December 2022 ended at 90.30 cents, 0.62 cent higher; estimated volume was 55,704 contracts.

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