Historical Revisions to Indian's Cotton Balance Sheet - USDA
Historical Revisions to Indian's Cotton Balance Sheet - USDA
Historical revisions have been made to India’s balance sheet for the years 2002/03 through 2013/14, with the stock adjustment carried forward. The revisions are based on the conclusion that market yard arrivals data underreported arrivals in the early portion of the harvest season. This conclusion was based on observed market activity in November for several years.
While corn remains the major safrinha crop for Brazilian farmers, more cotton acreage is being planted in Mato Grosso this spring, as well.
Over the past two years, cotton planting has increased by nearly one-third for the safrinha in Mato Grosso. The Brazilian Association of Cotton Producers(Abrapa) forecast cotton acreage to grow to 1.4 million hectares (3.46 million acres). Mato Grosso accounts for about 88% of Brazil’s cotton production.
China cotton imports in 2019/20 are expected to surpass the previous year’s robust level, reinforcing its position as the world’s largest importer. The current 2018/19 estimate, boosted this month, is expected to be the largest in 5 years as China supplements domestic supplies amid ongoing auctions of State Reserve stocks. Despite this strong upward trend in imports, U.S. exports to China have weakened as Brazil, Australia, and other countries have expanded both exports and market share.
Cotton Textile exports reached a level of USD 739.17 million in June 2019 marking a decline of (-) 30.4 per cent against the corresponding month of June 2018, wherein exports were valued at USD 1,061.96 million.
In rupee terms, exports during the month of June 2019 reached a level of Rs. 5,132.72 cr. as against Rs. 7,199.39 Cr. in June 2018 marking a decline of (-) 28.7 per cent in rupee terms.
The latest U.S. Department of Agriculture (USDA) estimates indicate that total U.S. cotton textile and apparel trade rose during the first half of 2019, compared with the corresponding 2018 period. U.S. cotton product imports totaled the equivalent of 9.0 million 480-pound bales of raw cotton during January-June 2019—compared with 8.8 million bales for the first 6 months of 2018—while cotton product exports declined slightly to 1.7 million bale-equivalents.
Highlights from the Inaugural Session of the 78th Plenary Meeting:
Consumers today are increasingly demanding information on the origin and history of the products they buy, putting pressure on retailers to provide transparency
Multiple technologies have the potential to provide that traceability, including blockchain and a host of products from private companies
Cotton Inc. Executive Cotton Update - February 2020
Executive Cotton Update - February 2020
Macroeconomic Overview: The Bureau of Economic Analysis estimates that the U.S. economy grew 2.3% in 2019. Forecasts suggest that growth could slow a little in 2020, with many projections falling between 1.9% and 2.1%. For comparison, in 2018, growth was 2.9% and in 2017 growth was 2.4%.
U.S. producers will plant 13 million acres in 2020
U.S. cotton producers intend to plant 13 million cotton acres this spring, down 5.5% from 2019 (based on the U.S. Department of Agriculture’s February 2020 estimate), according to the National Cotton Council’s 39th Annual Early Season Planting Intentions Survey.
Movement in benchmark prices was mixed over the past month.
The NY December futures contract moved lower (to below 60 cents/lb in late July) and then higher (near 65 cents/lb in early August) over the past month. Current values (63 cents/lb) are nearly even with those from one month ago.
Changes in Supply and Demand Estimates (from 17 August 2020)
Limited Cotton Recovery within Pandemic: Production and Stock Levels High, Slow Consumption Growth
Even as the most stringent containment measures begin to be lifted, the opportunity for economic recovery may not relieve current market uncertainty. Countries vary in their ability to flatten the contagion curve and the fiscal space to mitigate the pandemic associated recession.
All international benchmark prices increased over the past month.
The NY December futures contract climbed from 67 to as high as 72 cents/lb near the end of October. More recently, prices eased back to 70 cents/lb. Cotlook’s A Index rose from 73 to 76 cents/lb over the past month.
Procurement operations of seed cotton (Kapas) under MSP are going on smoothly in the States of Punjab, Haryana, Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, Telangana, Andhra Pradesh, Odisha and Karnataka. Till 23.03.2021 a quantity of 91,86,803 cotton bales valuing Rs.26,719.51 Crore has been procured benefitting 18,86,498 farmers.
Production, Consumption and Trade are Expected to Increase in 2021/22
For the current season, the global production estimate for 2020/21 has been reduced to 24.3 million tonnes this month with smaller crop estimates expected for India, Brazil, and the United States. For India, the latest meeting of the Committee on Cotton Production and Consumption (COCPC) reported production for 2020/21 at 6.12 million tonnes. With the country under crisis from a second wave of COVID-19, mill-use has been revised down to 5.15 million tonnes.
Uncertainty and panic over the OMICRON variant caused the cotton market, along with many other commodities, to drop significantly in price over the past 2 weeks.
Cotton set for best week in over 2 – months on strong export sales data
ICE cotton futures rose 3% on Friday and were headed for their best week in more than two months, supported by strong U.S. export numbers and on hopes of an uptick in demand from top consumer China.
• October was month of continuous down trend. NY December future lost about 1300 points during the month. USDA WASDE was bearish. USDA reduced world consumption by 3 million bales so world ending stock was also up by 3 million bales. Recession fear in Europe and America has created downward sentiment.
• US Export sales was poor also some cancellation from China reason for downtrend. But US is well committed to reach USDA export target.
The lack of demand is clearly a problem at the moment and as such the WASDE doesn’t reflect the right set of numbers in its balance sheet. While the supply side is now more or less known, the demand side is overstated by several million bales and will have to be adjusted lower over the coming months, which will have a bearish impact.
• November month started with sharp uptrend during the first week. NY Future closed limit up for the first four days in this month and jumped to 87 cents from 72 cents in just one week. There after remained highly volatility during the month.
This month’s 2022/23 U.S. cotton forecasts include higher production and ending stocks but lower mill use and exports. Production is 211,000 bales higher—at 14.2 million bales—mainly due to higher yields in the Delta and Southeast. Mill use is lowered 100,000 bales reflecting reduced spinning levels to date and weaker expectations for future demand. A reduction in expected world demand and trade results in a 250,000-bale decrease for U.S. cotton exports, down to 12.25 million.
The cotton market was somewhat higher Monday, inspired by adverse weather unfolding across the Belt, as well as continued supporters from Friday's acres report.
The cotton market was somewhat higher Monday, inspired by adverse weather unfolding across the Belt, as well as continued supporters from Friday's acres report.
COTTON: This month’s U.S. 2022/23 cotton forecasts include higher production and ending stocks, no change in U.S. mill use, and lower exports. Production is 438,000 bales higher, at 14.7 million, with yield at a record 947 pounds per acre, up 9 percent from the December estimate. Exports are forecast 250,000 bales lower, at 12.0 million, with both projected world trade and the U.S. share slightly lower this month. Ending stocks are up 700,000 bales to 4.2 million, equal to 30 percent of projected use.
COTTON: The 2022/23 U.S. cotton supply and demand forecasts show slightly lower mill use and higher ending stocks relative to last month, while production and exports are unchanged. The mill use forecast is lowered 100,000 bales to 2.1 million on recent lower rates of monthly utilization. The upland cotton marketing year average price received by producers is projected at 83 cents per pound, unchanged from January.
All cotton planted area for 2023 is estimated at 11.3 million acres, down 18 percent from last year. Upland area is estimated at 11.1 million acres, down 18 percent from 2022. American Pima area is estimated at 154,000 acres, down 16 percent from 2022.
Indian Farmers Might Be Holding Their Cotton but Global Production Remains Stable
In this edition of Cotton This Month, we will examine the current situation with delayed cotton arrivals in India and how this may affect the global balance sheets in the 2022/23 season.
Cotton prices surged higher going into the three-day weekend as the Easter holiday gave speculators reason to try the long side of the cotton market once again. In fact, all contracts out to March 2024 settled above 83 cents – a welcome relief not seen in recent weeks.
Since plummeting to the low 70s last fall, new crop December 2023 futures roller-coastered up, then down, then up again to near 86 cents by the end of January. December 2023 has since teetered within a five-cent range of mostly 79 to 84 cents over the past five months.
Cotlook’s May supply and demand forecasts indicate lower consumption and higher world ending stocks for both 2022/23 and 2023/24
Cotlook’s forecast of global raw cotton output in 2022/23 has been reduced this month, by 69,000 tonnes to 24,852,000 tonnes. Reductions for the African Franc Zone and the United States were partially offset by increases for China and Australia.
Cotton’s Slow Period Continues... But Planting Decisions Are Coming Soon
With the current season coming to a close it is time to start shifting our focus to the next season with high hopes and anticipation. Most of the Northern Hemisphere cotton producing countries have started planting, are preparing for planting, or are thinking about planting. Soil moisture is an essential ingredient for a successful planting operation.
December futures string of daily highs ended last week at eight. But not before reaching 88.39 which proved to be a trigger point for grower selling. However, as warned, when riding a wave of spec buying in a market environment with questionable underpinnings a reversal is always lurking. Such was the case on Thursday, when a triple digit selloff all but erased earlier gains. The tipping point being an overbought position, pressure from grower selling, and bleak exports sales.
COTTON: In this month’s 2023/24 U.S. cotton projections, beginning stocks are larger, and a 2.5- million-bale decrease in production results in lower exports, domestic use, and ending stocks. Beginning stocks are larger as this month’s 2022/23 ending stocks are increased 450,000 bales reflecting slightly lower exports and July 29 warehouse inventory levels in the AMS Bales Made Available for Shipment report.
THE COTTON MARKET RELINQUISHED GAINS FROM LAST WEEK’S WASDE REPORT
• Equity Markets Struggled with Mixed Economic Data • Surprising Demand from China Found on U.S. Export Sales Report for the Week Ending August 10 • U.S. Crop Continues to Deteriorate, Stemming from the Southwest
The market (Mar) lost 427 points last week, finishing at 83.62, with the Dec – Mar spread near flat at 7. Last week, our models predicted a finish on the week that was to be near-unchanged to higher Vs the previous week’s finish, which proved to be incorrect. The Dec contract experienced only one day of non-negative action last week with its 1-point gain on Friday. Dec has commenced the new week higher.
DECEMBER FUTURES MADE MODEST GAINS FOR THE WEEK ENDING AUGUST 24
• Equity Markets had a Mixed Week Before Eventually Settling Lower • Demand for U.S. Cotton Dismal for Week Ending August 18 • Deteriorating Crop Condition Continues to Worry Traders
The Big Tease – cotton prices shot higher on the week. Each successive daily close was higher than the prior day’s close. That folks, is the definition of an uptrend. Let’s get excited.
Too, the market captured the prior week’s losses. Sounds bullish – whatever that word means.
DECEMBER FUTURES FINISHED AUGUST IN THE UPPER END OF RANGE
• Outside Markets Higher Much of the Week Despite Unclear Economic Outlook • U.S. Export Sales Higher for Week Ending August 31, but Demand is Still a Concern • Damage to Crop from Hurricane Idalia Will Likely Be Minimal
I was wrong. Again. Last week’s price rally was no tease. This week’s news was real, and particularly good news at that. Cotton had a monumental week, shooting up to 90 cents, basis December and settling at 89.95, the best move in nearly a year. The August USDA world supply demand report set the stage for a price rally into the low 90’s but anemic demand had blocked prices from moving higher.
Last week was a case of bad news for some was good news to others. Hurricane Idalia was expected to take her Category 3 winds east of all but a small portion of the Georgia crop. Instead, upon landfall it veered slightly northward damaging a much larger expanse of the state’s crop. While abroad, China’s economy has slumped to the point its government announced Friday monetary policies would be instituted in an effort to bolster it.
COTTON MARKET AGAIN FINISHES WEEK WITH STRONG GAINS
Sep 05, 2023
The market gained 264 points last week, finishing at 89.95, with the Dec – Mar inversion expanding modestly to 18. Last week, our models predicted a finish on the week that was to be near-unchanged to higher Vs the previous week’s finish, which proved to be correct. Dec has commenced the abbreviated week significantly lower.
Keep An Eye on Cotton Prices and USDA September Report
Sep 08, 2023
December cotton futures lost all of last week’s price gains and then some, falling below 85 cents before correcting and positioning itself before making a run to the upper end of the trading range. Speculators were credited with the prior week’s run up and their associated profit taking, and the continuation of poor demand and weak economic indicators led the retreat to the 85-cent level.
DECEMBER FUTURES REACHED HIGHEST LEVEL IN A YEAR BEFORE TURNING LOWER TO FINISH THE WEEK
• Crude Oil Prices Reached Highest Level in 2023 • Delayed U.S. Export Sales Report Held Higher than Expected Demand for U.S. Cotton • Crop Conditions Basically Unchanged from Week Prior
COTTON: The 2023/24 U.S. cotton projections include higher beginning stocks but lower production, exports, and ending stocks. Beginning stocks are increased 550,000 bales, largely reflecting ending stocks data for the previous year from the Agricultural Marketing Service and the NASS Cotton System Consumption and Stocks report.
Stagnant Demand Continues to Suppress Cotton Market
Sep 15, 2023
Certificated stocks are coming to the Board. So what? Who cares?
Better care!!
It means that someone believes the best market for cotton is the futures market delivery mechanism. If delivery against futures is the best market for stocks, then it means the cash market does not want/need cotton. Of significant importance is that stocks are being moved to a privately-owned warehouse as opposed to a merchant/cooperative warehouse.
DECEMBER FUTURES TRADED HIGHER FOR THE MAJORITY OF THE WEEK
• Strong Economic Data Has Many Betting Another Pause in Interest Rates Will Occur • U.S. Production Cut to 13.13 million Bales • Demand for U.S. Cotton Remains Tepid • Only 29% of the Cotton Crop in the U.S. is Rated Good to Excellent
We entered last week expecting a great deal of market volatility as a host of fundamental and macroeconomic reports were scheduled for release. So it was, after advancing over 200 points ahead of the September WASDE it fell prey to the old buy the rumor, sell the fact idiom. Thus, giving back nearly all these gains to close Friday at 86.44, for a paltry gain of 53 points on the week.
Certificated stocks continue to flock to the Board, implying that the best market for U.S. cotton is delivery against the New York ICE futures contract. More troubling for those wishing – and hoping – for higher prices is that futures prices above 87 cents are better than the price offered by mills.
• Fed Held Interest Rates Steady at September Meeting • A Net Total of 105,400 Upland Bales and 800 Pima Bales were Sold for the Week Ending September 14 • Above Average Temperatures and Precipitation Expected in the Week Ahead
Dec cotton futures gave up 53 points on the week (the very same 53 points it gained last week) finishing at 85.91, with the Dec – Mar spread strengthening a bit to (84). Last week, our models predicted a finish on the week that was to be near-unchanged to higher Vs the previous week’s finish, which proved to be correct. Dec has commenced the new week notably higher.
Cotton’s Tight Price Range Faces Little Pressure to Change
Sep 29, 2023
This week’s cotton rally was technical based. Fundamentals have essentially prohibited the market from moving above the 90-cent mark, a resistance level that has withstood four challenges. The resistance line is neither battered nor bruised, but eventually a door that is continually kicked will break.
DECEMBER FUTURES FINISHED HIGHER FOUR OUT OF FIVE TRADING SESSIONS
• Major Indexes were Mixed and Crude Oil Reached a 13-Month High • Market Ignored Poor Export Sales for Week Ending September 21 • As of September 24, 13% of the U.S. Crop has been Harvested
For the past three months cotton prices have traded in a range from 85 to 90 cents. Last week proved no exception. After prices fell to 85 cents, last week mill fixations and spec buying drove prices to a three-week high of 89.89. Unfortunately, ninety cents again proved insurmountable as grower hedging forced prices lower closing Friday at 87.15 for a weekly gain of 124 points. Such an advance with a government shutdown all but certain was very impressive.
Can the 90-Cent Cotton Market Barrier Be Breached?
Oct 06, 2023
Cotton prices fell below 87 cents on the week but quickly rallied, yet they were unable to trade up to 88 cents. Thus, after last week’s rally above 89 cents, the market fell back into another protracted line of back-and-fill trading.
The 90-cent technical resistance barrier continues to be “A Bridge Too Far.”
DECEMBER FUTURES FOLLOWED OUTSIDE MARKETS FOR THE WEEK ENDING OCTOBER 5
• Slew of Activity Caused Major Indexes to be Mixed • Healthy Demand for U.S. Cotton Reported for Week Ending September 28 • As of October 2, 18% of the U.S. Crop has been Harvested
Encouraging best describes the way cotton prices withstood last week’s onslaught of poor economic news. Its underlying strength was found in a shrinking crop. With eighteen percent of the U.S. crop now harvested less than favorable yields are fast becoming a reality. Traders weighing short supplies versus dismal demand are desperately seeking confirmation.
COTTON: The 2023/24 U.S. cotton supply and demand estimates show lower production, exports, and ending stocks compared with last month. Production is 315,000 bales lower at 12.8 million bales, down 2 percent from a month earlier as lower yields in Texas offset gains elsewhere. With production projected lower and exports down 100,000 bales to 12.2 million, ending stocks are reduced 200,000 bales.
DECEMBER FUTURES FELL TO LOWER END OF TRADING RANGE, SETTLING LOWER FOR FOUR CONSECUTIVE SESSIONS
• CPI Marginally Higher than Expected, Increasing 0.4% in September • U.S. Total Cotton Production Expected to be 12.817 Million Bales • Weak Sales and Poor Shipments Reported for Week Ending October 5 • Favorable Harvest Weather Expected Across West Texas, Oklahoma, and Kansas in the Coming Week
DECEMBER FUTURES FELL BELOW RECENT LONG-TERM TRADING RANGE FOR THE WEEK ENDING OCTOBER 19
• U.S. Retail Sales Higher than Expected, but Clothing Sales Declined, Adding Pressure to Cotton Prices • Lackluster Demand for U.S. Cotton Reported for Week Ending October 12 • Favorable Harvest Weather Set to Continue in Upcoming Week
Positive Week for Cotton, But Beware Growing Consumer Stress
Oct 27, 2023
Cotton prices were down two of the five trading days this week but still closed on the positive side of the 9-, 100-, and 200-day support lines. December did settle 198 points higher on the week – a real market winner compared to the Dow, NASDAQ, and Russell 2000. December futures ended the week at 84.38, but down 21 points in Friday’s trading but up 198 points on the week.
DECEMBER FUTURES FELL BELOW RECENT LONG-TERM TRADING RANGE FOR MOST OF THE WEEK ENDING OCTOBER 27
• U.S. GDP Surged in Third Quarter, Beating Market Expectations • An Uptick in Demand for U.S. Cotton Reported for Week Ending October 19 • Adverse Weather in Coming Week Could Hinder Harvest Activities Across Texas, Oklahoma, and Kansas
DECEMBER FUTURES SETTLED BELOW 80.00 CENTS PER POUND FOR WEEK ENDING NOVEMBER 2
• Stock Market Finished Higher after the Federal Open Markets Committee Held Interest Rates Steady • Marketing Year High Reached in Both Upland and Pima Sales for the Week Ending October 26 • Hard Freeze and Wet Weather Stalled Harvest, but Warmer Temperatures Expected in Week to Come
After months of repeated challenges, our biggest fear was market support in the low 80’s would break. How appropriate it would do so Halloween week. It appears sellers were spooked by frightful technical signals and a geopolitical environment which could have horrific consequences. As a result, after three consecutive days of triple digit losses the market closed below 80 cents for the first time since June.
COTTON: The 2023/24 U.S. cotton balance sheet shows slightly lower consumption but higher production and ending stocks this month. Production is 273,000 bales higher, at 13.1 million bales, as lower production in Texas is more than offset elsewhere. Domestic mill use is 100,000 bales lower, reflecting the pace of recent consumption, and exports are unchanged, leaving ending stocks 400,000 bales higher at 3.2 million bales or 22.5 percent of use.
COTTON PRICES CONTINUED TO DECLINE, REACHING AN 11-MONTH LOW DURING THE WEEK
• Stock Market Was Higher Most of the Week • U.S. Production was Raised 270,000 Bales to 13.09 million Bales on November WASDE Report • Strong Export Sales were Reported but Shipments Continue to Disappoint • As of November 5, 57% of the 2023/24 Crop Has Been Harvested Across the Cotton Belt
A Better Week, as Lower Cotton Prices Lift Exports
Nov 17, 2023
Cotton prices held the line in weekly trading as last week’s low prices encouraged good export sales. That, coupled with government released economic data hinting, on the surface, at an improved economy, gave prices a higher nudge every day of the week.
Last week’s activity centered around spread trading as December prepares to exit the board and March becomes the official cover month. Though prices moved in a consolidated range both contracts posted triple-digit gains, erasing nearly all the previous week’s losses. December traded as high as 79.88 before settling at 78.92 for a gain of 160 points. While March traded as high as 81.87 before settling at 81.51 for a gain of 201 points.
WITH THE DECEMBER CONTRACT ALL BUT GONE, TRADERS SHIFT FOCUS TO THE MARCH CONTRACT
• Stock Market Continued to Climb Higher for the Fourth Consecutive Week
The holiday-shortened trade week was busy with many traders clearing out the rest of their December positions. First Notice Day is on Friday, and daily volume has been active leading up to it.
If you like watching paint dry or chrome rust, last week’s cotton market was the place to be. Although, after the zaniness of the past few weeks, it was somewhat welcomed. With merchants closing early on Wednesday followed by an abbreviated trading session on Friday, volume was well below average. Moving in a narrow range of only two cents over the course of the week, March futures settled at 80.99 for a small loss of fifty-two points.
COTTON MARKET WAS OVERALL LACKLUSTER TO WRAP UP THE MONTH OF NOVEMBER
• Stock Market was Mixed this Week, but Made Strong Gains in November • U.S. Export Sales were Healthy for the Week Ending November 23 • WASDE Report will be Released on December 8
How the Grinch Stole Cotton’s Christmas Dec 01, 2023
The Grinch has certainly stolen Cotton. The cotton market offered its first gifts of the Christmas season to the Bears, while the Bulls are left staring at unopened presents stacking up on the Bears’ side of the tree.
Market Desperately Searching For Direction December 4, 2023
After falling a precipitous 173 points on Monday, cotton prices found some footing and traded narrowly from that point on. March futures settled at 79.42, a loss of 157 points. It is obvious this market is desperately searching for direction. Unfortunately, for now the only steering currents are a lack of demand and grower pricing pressure. Both of which are sure to stymie any significant advances.
COTTON: This month’s 2023/24 U.S. cotton forecasts include lower production, mill use, and ending stocks. Production is reduced 314,000 bales to 12.8 million largely due to a 500,000-bale decrease in the Texas crop. U.S. mill use is reduced 150,000 bales as spinning activity continues to lag, and at 1.9 million bales, is expected to be its lowest since 1884.
MARCH FUTURES FINISHED THE WEEK ENDING DECEMBER 7 WITH STRONG GAINS
• Stock Market was Mixed this Week, but Managed to Maintain November’s Gains • S. Production Cut to 12.78 million bales and World Use was Cut to 113.73 million bales • U.S. Export Sales were Down for the Week Ending November 30
Markets can be very fickle. After lingering aimlessly around eighty cents for most of last week, current crop futures traded limit up Thursday for no apparent reason. Certainly, a head-scratcher for it followed mediocre export sales and little fundamental or economic news. Nevertheless, cotton prices had their biggest one week jump since late August closing Friday at 81.44 for a gain of 202 points.
Price Swings and Weak Demand Continue to Feed the Cotton Bears*
There is a bit of procrastination here. I really do not want to communicate these words. It is time to be bullish. I want to get there. I just cannot get there. The big tease is still ongoing.
Cotton prices for the week traded in a high-to-low range of only 190 points. Every attempt to move beyond eighty-two cents was quickly stifled by grower selling while downside support held firm at 80 cents before giving way slightly on Friday closing at 79.83. This was disheartening when at the same time the Dow, S&P 500, and NASDAQ were hitting all-time highs.
The New Year is threatening to open a door to higher prices for cotton. The final week of the year saw higher prices each day – a very unusual trading pattern, and “unusual” can typically be associated with bullish news.
MARCH FUTURES TRADED SIDEWAYS DURING THE HOLIDAY-SHORTENED TRADE WEEK
• Outside Markets Pullback to Start 2024 • U.S. Export Sales Slowed During the Holiday Season • Cotton Grower Magazine Survey Reported Cotton Acres Will Hold Steady in 2024
Cotton Prices Will Change in 2024. Just Don’t Ask When or Why.
Stealing a word from the Varner Boys, cotton trading began the New Year just as it ended the old one –“boring.” That is changing this marketing year. Don’t ask me how, why, or when. I do not know that yet. We will figure it out together.
COTTON: This month’s U.S. 2023/24 cotton forecasts include lower production, exports, and ending stocks. Production is 342,000 bales lower, at 12.4 million bales, largely due to reductions in Texas. Exports are 100,000 bales lower, and ending stocks are 200,000 bales lower at 2.9 million. The season-average upland price received by farmers is projected 1 cent lower this month at 76 cents per pound.
MARCH FUTURES FINISHED WITH STRONG GAINS AFTER TRADING SIDEWAYS MOST OF THE WEEK
• CPI Added Layer of Uncertainty to Fed’s Decision • U.S. Production Cut to 12.434 Million Bales, World Use Cut to 112.43 Million Bales • U.S. Export Sales and Shipments Unexpectedly Strong for the Week Ending January 4
USDA’s January supply demand report doused water on the market’s attempt to light up futures prices. The price outlook for the nearby March contract remains, as the Varner Boys commented last week, boring. Prices did climb above the short-term moving averages, but expectations for any lasting positive market response is lacking. The On-Call report continues to be negative (or as another said, “There is nothing positive in it.”).
MARCH FUTURES FINISHED WITH STRONG GAINS FOR THE SECOND CONSECUTIVE WEEK
• Stock Market Managed to Recover Losses by the End of the Week • U.S. Export Sales Report Held Phenomenal Sales and Shipments for Week Ending January 11
“The Fabric of Your Life” is demonstrating a bit of market excitement. Let us hope it can continue.
The cotton market has turned a bit volatile, just as the equity and finance markets have. Long-term interest rates are increasing slightly as the market debates if, when, and should the Fed even push short-term rates lower.
Cotton continued its bullish run all week, all but challenging the top end of the yearlong-plus trading range. As expected, price resistance at the 86-cent trading level halted the advance.
Comments Prior to the USDA February WASDE Release. Early report due to surgery schedule.
Run Forrest Run! Old crop and new crop headed higher.
Once again, Never Give Up On Cotton. Granted, what goes up does come down, and it is not going to be all roses. Yet, the old crop’s run to 90 cents is real, and a little more. Too, the 2024 new crop December will hit the 85 cent mark and will find considerable pressure to move to 90 cents and better.
COTTON: The 2023/24 U.S. cotton balance sheet has lower ending stocks relative to last month, with higher exports and lower mill use, while production is unchanged. The export forecast is raised 200,000 bales to 12.3 million based on a strong pace of shipments and sales to date. Similarly, projected mill use is reduced 150,000 bales as U.S. domestic spinning activity remains low. Ending stocks are now estimated at 2.8 million bales, equivalent to 20 percent of total disappearance.
At Current Prices, Cotton Is a Speculative Market. And That’s Okay.
Feb 23, 2024
Run Forrest run! And boy, did he do his running.
The March contract ran to a high of 95.42 cents before giving up on its first notice day, giving way to the May futures contract as the spot month. Thus, the stage is set for May’s challenge of 96 cents. The pure technician suggests a run to 101 cents…which will not happen!
COTTON: This month’s 2023/24 U.S. cotton forecasts show lower production and ending stocks relative to last month. Production is reduced 334,000 bales to 12.1 million, based on the March 8 Cotton Ginnings report. The final estimates for this season’s U.S. area, yield, and production will be published in the May 2024 Crop Production report. Ending stocks are 300,000 bales lower this month at 2.5 million.