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DTN Morning Cotton Commentary 07/23 07:43
Cotton Higher Thursday on Weather
The cotton market is trudging higher Thursday as weather forecasts for West
Texas show virtually no rain and much-above-normal temperatures for the
foreseeable future.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is trudging higher Thursday as weather forecasts for West
Texas show virtually no rain and much-above-normal temperatures for the
foreseeable future. In addition, traders see WTI oil is beyond the $90 mark
Thursday morning, which is seen as an inflation driver.
USDA just released its weekly export sales report with the following numbers:
"Net sales of Upland totaling 51,300 RB for 2025/2026 were up 49 percent
from the previous week, but down 12 percent from the prior 4-week average.
Increases primarily for China (15,500 RB, including 1,000 RB switched from Hong
Kong), Vietnam (12,300 RB, including 1,600 RB switched from South Korea and
decreases of 1,900 RB), India (7,100 RB), Bangladesh (4,400 RB, including 1,700
RB switched from India), and Mexico (3,700 RB), were offset by reductions for
South Korea (1,600 RB), Hong Kong (1,000 RB), Pakistan (700 RB), and Turkey
(100 RB). Net sales of 16,100 RB for 2026/2027 primarily for Vietnam (7,100
RB), India (4,700 RB), Pakistan (2,200 RB), Peru (1,500 RB), and Mexico (1,200
RB), were offset by reductions for South Korea (1,900 RB), Nicaragua (1,900
RB), and Guatemala (100 RB). Exports of 276,300 RB were up 29 percent from the
previous week and 15 percent from the prior 4-week average. The destinations
were primarily to Vietnam (96,300 RB), Pakistan (42,700 RB), Turkey (31,800
RB), India (20,400 RB), and Bangladesh (16,400 RB). Net sales of Pima totaling
3,200 RB for 2025/2026 were down 11 percent from the previous week, but up 15
percent from the prior 4-week average. Increases reported for India (2,400 RB),
Pakistan (400 RB), Turkey (400 RB), and Thailand (200 RB), were offset by
reductions for Japan (100 RB). Net sales of 1,500 RB for 2026/2027 were
reported for Peru (1,100 RB) and India (400 RB). Exports of 8,000 RB were up 3
percent from the previous week, but down 37 percent from the prior 4-week
average. The destinations were primarily to Vietnam (2,200 RB), India (2,100
RB), Costa Rica (900 RB), Egypt (900 RB), and Pakistan (800 RB)."
On Friday at 3:30 p.m. EDT, the CFTC will update its Commitments of Traders
information. Last week saw the managed-money funds buying in some 10,500
positions, further enhancing their net-long carry to 49,688 contracts.
The 6- to 10-day weather forecast (July 2-Aug 1) shows much-above-normal
temperatures for Texas, while the Delta and the Southeast will experience
above-normal readings. Rain-wise, the Texas Panhandle looks to have normal
chances, but farther south, the call is for below-normal precipitation. The
Delta is split between below-normal and normal chances, while the Southeast
should have slightly above-normal odds.
Crude oil is sharply higher Thursday amid fears the Middle Eastern War
Theater is widening. Apparently, the Houthi rebels of Yemen are attempting to
control the Red Sea. Supposedly they have hit a Saudi oil tanker. Of course,
the U.S. continues to strike various targets in Iran.
Chart support for December cotton stands at 80.50 cents and 79.50 cents,
with resistance around 82.50 cents and 83.10 cents. Thursday morning's
estimated volume is 9,729 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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