DTN Cotton Close: Lower as Market Preps for Reports
December 08, 2021
The cotton market is lower Wednesday morning as some traders square up for Thursday’s USDA report. First off Thursday, at 8:30 a.m. EST, the market will see new export sales numbers, followed by the December Crop Report at High Noon.
Last week’s showing for weekly sales was very impressive as China was the top buyer. Unfortunately, that bullishness did not carry over into the shipments data, which came in with roughly 71,000 bales. Of course, logistically speaking, the global shipping crisis is a massive hindrance to the U.S. cotton industry.
The noon crop report is expected to show an increase in domestic ending stocks, again a function of the global supply-chain crisis, but a decrease in global stocks. Apparently, production problems in India and strong Chinese textile demand are whittling away at world inventories.
Traders continue to watch the U.S. dollar. Next week’s meeting of the Federal Reserve as to its schedule of tapering, tantamount to the raising interest rates, will greatly affect the path of the greenback.
For Wednesday, close-in support for March cotton is 105.00 and 104.25, while resistance stands at 107.50 and 109.00. The estimated morning volume is 5,757 contracts.