DTN Cotton Open: Limit-Up Overnight

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    Overnight trading in China pushed the cotton prices to limit-up despite Friday’s poor export sales report. To that end, USDA reported net sales of 146,700 RB for 2021/2022 were down 41 percent from the previous week and 60 percent from the prior 4-week average.

    Increases primarily for Turkey (62,000 RB), Mexico (52,900 RB), China (12,100 RB, including decreases of 3,100 RB), Thailand (9,500 RB, including 400 RB switched from Indonesia), and Peru (5,800 RB), were offset by reductions for Vietnam (2,200 RB), Honduras (1,700 RB), and Pakistan (1,700 RB).

    Net sales of 10,600 RB for 2022/2023 resulting in increases for Mexico (15,000 RB), were offset by reductions for Turkey (4,400 RB). Exports of 95,200 RB–a marketing-year low–were down 24 percent from the previous week and 46 percent from the prior 4-week average. The destinations were primarily to Mexico (23,400 RB), China (23,000 RB), Vietnam (11,300 RB), Bangladesh (9,500 RB), and Turkey (6,600 RB).

    Net sales of Pima totaling 6,400 RB–a marketing-year low–were down 53 percent from the previous week and 60 percent from the prior 4-week average. Increases were primarily for Peru (5,200 RB) and Bangladesh (1,100 RB). Exports of 10,600 RB were up noticeably from the previous week and up 91 percent from the prior 4-week average. The destinations were primarily to India (6,800 RB), Peru (1,500 RB), South Korea (700 RB), Turkey (600 RB), and Italy.

    Traders assume today’s poor business is a reflection of the global shipping crisis, which eventually will be improved.

    Weather-wise, the one to five-day forecast calls for moderate rain across the Delta and the Southeast, while Texas remains mostly dry. However, the 6 to 10-day and the 8 to 14-day outlooks indicate above normal chances of rain in Texas, normal to below normal for the Delta, and below normal in the Southeast.

    Friday afternoon, CFTC will update its traders’ positions. Managed-money funds are expected to have increased their net long holdings. That data is out at 4 p.m. EDT.

    For Friday, close-in support for December cotton is 107.50 cents and 103.50 cents, while resistance stands at 111.50 cents, 112.50 cents and 108.10 cents. The estimated morning volume is 22,080 contracts.

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