DTN Cotton Close 08-Sep-2021
Posted : October 23, 2021

DTN Closing Cotton: Cotton Hooks and Reverses

September 8, 2021

 

By Keith Brown, DTN Contributing Cotton Analyst

The cotton market initially traded higher Wednesday, even surpassing the 95.00-cent mark, but overhead grower-selling, as well as some speculative squaring, pushed prices off.

The cotton market initially traded higher Wednesday, even surpassing the 95.00-cent mark, but overhead grower-selling, as well as some speculative squaring, pushed prices off. Nonetheless, the appearance of late session “recovery buying” slightly lifted prices positive. Still to the former point, producers haven’t seen 95 cents as an actionable price since the big Aug. 17 high, thus they were willing sellers at 95.00 cents or greater. Yet, when some of the net-long speculative traders saw that 95.00 cents was not going to stick, they became skittish and sold into the rally as well. Of course, all eyes are on Friday’s WASDE data from USDA.

For Friday’s supply-demand data, the average trade guess for the 2021-22 cotton crop is 17.70 million bales. That number is in contrast to August’s data of 17.26 million bales. Domestic ending stocks are anticipated at 3.43 million bales, up from 3.00 million in August. World ending stocks are expected to come in at 87.67 million bales versus 87.23 in August.

Weekly export sales are delayed until Friday as well. Last week’s data was indeed a poor showing, as the combined sales amount came to some 125,000 or so bales. Prior to that, combined seasonal sales had been averaging some 300,000-plus bales. Of late, China has been noticeably absent as a major buyer of U.S. cotton.

For Wednesday, December settled at 94.08 cents, up 0.03 cent, March ended at 93.26 cents, unchanged, and December 2022 ended at 82.90 cents, 0.17 cent lower; estimated volume was 32,051 contracts.

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