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DTN Closing Cotton 02/10 13:32
Cotton Market Finds Support
After being pummeled into several contract lows for weeks on end, the cotton
market seems to have found some support.
Keith Brown
DTN Contributing Cotton Analyst
After being pummeled into several contract lows for weeks on end, the cotton
market seems to have found some support. Although today's supply-demand numbers
were "less than generous," prices held positive into the close.
From USDA's website, the summary for cotton was as follows: "Changes to the
2025/26 U.S. cotton balance sheet are minimal this month with the export
projection reduced 200,000 bales on lagging sales and ending stocks raised by
the same amount for an ending stocks-to-use ratio of 32 percent. Production,
beginning stocks, and mill use are unchanged. The projected 2025/26 season
average upland farm price is lowered 1 cent to 60 cents per pound. In the
2025/26 world cotton balance sheet, production and ending stocks are raised
while consumption and trade are reduced. The estimate of 2025/26 global
production is 425,000 bales following increases for China and South Africa that
are partially offset by reductions for Argentina and Mexico. Global consumption
is lowered 200,000 bales with a 100,000-bale reduction for Pakistan and small
reductions elsewhere. The estimate for world exports is reduced by 60,000 bales
as the changes in U.S. and Australian exports exactly offset, and small changes
are made for several countries. Back-year revisions for Mali, Afghanistan, and
Mexico result in a negligible decline in 2025/26 beginning stocks. With these
changes, global-ending stocks for 2025/26 increase by almost 630,000 bales to
75.1 million, for an ending stocks-to-use ratio of 63 percent."
Wednesday, traders will see the delayed U.S. payrolls report for January.
Estimates call for a non-farm payroll number between 70,000-80,000 jobs, with
an unemployment rate of 4.4%. Some analysts are now pricing an interest rate
cut during the first half of this year, rather than in the second.
On Thursday, the NCC will release its 2026 acres survey on Feb. 12. Although
not an official government report, nonetheless, it will be the first
fundamental look at the potential for 2026. Last year's survey showed
intentions of 9.6 million cotton acres, down 14.5% from 2024.
Credit card balances hit a fresh high in the fourth quarter, rising by $44
billion to $1.28 trillion, according to the Federal Reserve Bank of New York.
That number is a 5.5% jump from a year earlier. The central bank's monthly
survey found that fewer consumers expect their households' financial situation
to be better a year from now, and a larger share expect to be worse off.
For the ICE market Tuesday, July was 65.48 cents, up 3 points; December 2026
closed at 68.09 cents, plus 14 points; and March 2027 finished at 69.02 cents,
20 points higher. Tuesday's estimated volume was 131,351 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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