DTN Cotton Close: Market Eases Lower on Neutral Data
December 9, 2021
The cotton market ended Thursday slightly lower, despite neutral to friendly supply-demand numbers. Essentially, USDA kept domestic ending stocks unchanged at 3.40 million bales, but did slash world carryout some 1.20 million bales.
The report somewhat underscored the situation whereby the difficulty of exporting U.S. cotton is resulting in domestic inventories to rise, versus textile-spinning nations having to draw down on their own reserves. Thus, global stocks are declining.
Earlier Thursday morning, USDA released its exports-sales data. Sales were 382,700 versus last week’s 375,000 bales. As with last week’s business, China was the top buyer Thursday with 147,700 bales. Going into the report, cumulative sales have reached 64% of USDA’s forecast for the marketing year versus a five-year average of 65%.
Friday, the CFTC will issue its weekly commitment of traders report. Amazingly, the managed-money funds have been net long the ICE cotton futures for 15-plus months. At times their position teetered on a net long position of 100,000 contracts. However, of late, their collective holdings have been pared down to roughly 77,000 plus or minus contracts.
Heading into Friday’s session, March cotton is up 2.39 cents on the week, a mere 0.18 cent up on the month and about 31.32 cents higher on the year.
Thursday, March cotton settled at 106.59 cents, down 0.13 cent, July ended at 103.10 cents, down 0.12 cent and December ended at 89.84 cents, 0.10 cent higher; estimated volume was 18,968 contracts.