DTN Cotton Open: Lower on Dollar, Exports

    Cotton modules lined up after harvest. ©Debra L Ferguson

    Cotton is weaker Friday as the growing strength of the U.S. dollar is weighing on the export business, as well dampening the bullish enthusiasm of the industry. Friday’s weekly export sales numbers (see below) were abysmal. Clearly, the global shipping crisis continues to maintain its bearish grip on the nation’s trading commerce.

    USDA reported the following exports-sales business on its website: Net sales of 128,000 RB for 2021/2022 were down 8 percent from the previous week and 51 percent from the prior 4-week average. Increases primarily for China (78,800 RB), Bangladesh (16,800 RB), Turkey (13,300 RB), Pakistan (8,100 RB), and South Korea (7,900 RB), were offset by reductions primarily for Indonesia (12,900 RB).

    Net sales of 11,600 RB for 2022/2023 were reported for Costa Rica (5,000 RB), Pakistan (4,400 RB), and Turkey (2,200 RB). Exports of 87,900 RB were down 38 percent from the previous week and 16 percent from the prior 4-week average. The destinations were primarily to China (36,700 RB), Mexico (18,000 RB), Vietnam (8,100 RB), Indonesia (7,100 RB), and Pakistan (3,300 RB).

    Net sales of Pima totaling 6,500 RB were down 80 percent from the previous week and 63 percent from the prior 4-week average. Increases were primarily for India (3,900 RB), China (900 RB switched from Vietnam), Peru (700 RB), Germany (400 RB), and Bahrain (300 RB). Exports of 9,600 RB were up 25 percent from the previous week and 48 percent from the prior 4-week average. The destinations were primarily to India (7,900 RB), Greece (400 RB), South Korea (400 RB), Bangladesh (400 RB), and Austria (300 RB).

    Monday afternoon the CFTC will update the status of the managed-money funds, delayed due to Thursday’s holiday. Of late their long-term bullish position has been waning. Also Friday, options on the December Contract expire.

    Next week, traders will see another harvest progress update on Monday. Last week the pace of the 2021 harvest was reported at 55% complete. Weather-wise the 6 to 10-day forecast calls for above normal temperatures for much of the cotton belt, but with near-normal temperatures for Georgia. Rain-wise, West Texas looks to be dry, while East Texas and the Delta have above-normal precipitation changes, while the Southeast looks to have below-normal chances for rain.

    For Friday, close-in support for December cotton is 117.50 cents and 116.20 cents, while resistance stands at 120.75 cents and 121.00 cents. The estimated morning volume is 13,253 contracts.

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