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DTN Closing Cotton 07/01 13:48
Cotton Up on India Drought Fears and Index Fund Buying
The cotton market was materially higher today amid fresh quarterly buying
from speculative index funds, and growing concerns with India's growing
conditions.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market was materially higher today amid fresh quarterly buying
from speculative index funds and growing concerns about India's growing
conditions. Additionally, traders will see new export sales data tomorrow, as
well as a monthly jobs report update.
Tomorrow, USDA will issue fresh exports-sales numbers. Last week,
current-crop sales were 83,000 bales, down 53%, while shipments were some
300,000 bales, up 20%.
The Labor Department will release its monthly jobs report on Thursday. Last
month saw a job tally of 172,000, with an unemployment rate of 4.4%.
Expectations for tomorrow are for 113,000 new non-farm jobs. The report is out
at 8:30 a.m. EDT.
There are growing concerns over the effects that El Nino is having on India.
She recorded her driest June in more than a decade, and this has slowed the
planting of summer-sown crops including cotton, but rains forecasted for the
early part of this month could give them a chance to catch up. World Weather
Inc. says rain is needed in the unirrigated areas of West Texas.
National weather outlets are emphasizing that rain is still needed in the
unirrigated areas of West Texas. Some partial relief is expected over the next
few days, but with very warm to hot temperatures and restricted rainfall for at
least a week after that, it could stunt any significant improvement in crop
conditions or soil moisture. Next week, USDA will issue its crop progress data,
which is likely to show a decline in US crop conditions.
On the energy front, the EIA report was slightly negative for crude oil
relative to expectations, more decidedly negative for diesel, and supportive
for gasoline. Implied gasoline demand was strong relative to the previous week
and a year ago. Crude oil stocks, excluding SPR, are the lowest since September
2018. Gasoline stocks are the lowest for this point in the season in at least
six years. Distillate stocks are up off their lows from May and have moved
above year-ago levels, but they are still the second-lowest for this point in
the season in at least six years.
For today, July closed at 73.28 cents, up 104, December closed at 77.82
cents, plus 104 and March 2027 finished at 79.19 cents, up 105 points. Today's
estimated volume was 25,680 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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