Firm Friday for Cotton

Cotton futures closed red on Friday, but by within 10 points. March prices were rallying into the USDA reports, but fell back to the red after seeing the data. March futures were still 112 points higher for the week. The market will be closed on Monday to observe Martin Luther King jr Day. USDA lowered the cash average price for cotton by a penny to 76 cents/lb. 

Weekly data from CFTC showed the funds were adding new shorts in their cotton position during the week that ended 1/9. That extended the group’s net short by 2.5k to 6.9k contracts. Commercial cotton traders added 4.6k new contracts during the week, but on net only reduced their net short by 144 to 40,585. 

Monthly S&Ds from USDA showed NASS reduced cotton acreage by 960k, but raised the yield by 80 lbs/acre to 7.06 million and 845 respectively. On net production was 350k bales lower to 12.43, and is now below last year’s output. A 100k bale export trim was the only demand shift from the Dec table, leaving carryout a net 200k tighter at 2.9 million bales. 

Global S&Ds had cotton production a net 260k bales higher to 113.18 million as a 500k bale increase to China offset the U.S. cut. Cotton carryout stocks were 1.98m bales looser to 84.38 million bales on lighter domestic use. 

USDA’s weekly Cotton Market Review had 42,224 bales sold during the week with prices averaging 76.75 cents. The Seam reported 22,424 bales were sold online on 1/11 for an average gross price of 75.71 cents/lb. The Cotlook A Index was 25 points stronger on 1/9 to 90.65 cents/lb. The AWP was up by another 80 points to 64.96 cents/lb., effective through next Thursday.  

Mar 24 Cotton  closed at 81.31, down 5 points,

May 24 Cotton  closed at 82.29, down 4 points,

Jul 24 Cotton  closed at 82.94, unch