Cotton Rallies into New Month
The triple digit gains have futures sitting up 180 points and at new highs for the move as the Labor Day weekend approaches. Cotton traded in a tighter range on Thursday, ending firm but in the red. Losses across the front months were limited to less than 6 points.
The weekly Export Sales report had 61,438 RBs of cotton exports for the week that ended 8/24. That was up 58% for the week but down from the ~129k RBs sold during the same week last year. Cotton exports were 214k RBs, for a YTD total of 750k through the first 4 weeks. That trails last season’s pace by 27%.
USDA’s Ag attaché estimated lower area for Chinese cotton, but at 2.95m HA the attaché is still 950k above the official WAOB estimate. Production of 27.1m bales would be a 3.6 million drop yr/yr, leaving room for potentially 2.5m bales of additional imports. The official WASDE estimate is higher at 10m bales (+3.8m yr/yr). The Attache cited higher input costs for their 30% yr/yr drop in Mexican cotton production to 1.1m bales. USDA’s official estimate is for 1.28m bales in Mexico. Mexican cotton imports were listed at 900k bales, up 200k from last year in the Attache report, compared to the 1m bales from the WASDE.
The Seam reported 15,262 bales were sold online for an average gross price of 86.09 cents/lb. The Cotlook A Index for 8/30 was UNCH at 96.95 cents/lb. The updated AWP for cotton was 71.56 cents, up by 2.5 c/lb.
Dec 23 Cotton closed at 87.82, down 6 points, currently up 143 points
Mar 24 Cotton closed at 87.73, down 1 point, currently up 127 points
May 24 Cotton closed at 87.68, unch, currently up 116 points
On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
