Cotton futures rallied back to limit the midweek drop to 26 to 42 points across the old crop contracts. March was down by 149 points at the day’s low. The new crop contracts stayed in the red with 52 to 72 point losses on the day. Dec cotton is now 7 cents below the spot March contract. The cash average price was left at 83 cents.
USDA made essentially no changes to the domestic cotton balance sheet, with just a 100k bale lighter domestic use and looser carryout. The ending stocks figure is now shown at 4.3m bales. Global S&Ds saw a 1.03m bale production trim – mainly from India. The global carryout was 850k bales tighter to 89.08 million.
USDA’s Ag Attaché reduced the Pakistani cotton import forecast to 4.5m bales from 5 flat citing importer financing. Their total use was unchanged at 9m bales such that the 500k supply cut came out of their ending stocks. In the WASDE report, USDA had Pakistan’s cotton import at 4.5 million, also lighter by 500k bales, with a 1.44m bale carryout.
CONAB increased their Brazilian cotton production outlook by 19.2% to 13.97m bales – USDA has their updated forecast at 13.3 m bales as of the WASDE update.
The Cotlook A Index was 98.80 cents/lb on 2/07, which was 190 points lower. The AWP for cotton is 75.24 cents for the week, and will be updated tomorrow.
Mar 23 Cotton closed at 85.37, down 26 points,
May 23 Cotton closed at 86, down 38 points,
Jul 23 Cotton closed at 86.64, down 42 points
On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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