DTN Morning Cotton Commentary          05/16 07:43

   Cotton Attempts to Fix Oversold State

   The cotton market is higher Thursday as, to some degree, the market has run 
out of willing sellers. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is higher Thursday as, to some degree, the market has run 
out of willing sellers. Given its recent price implosion, such is 
understandable. Participants will assess Friday's export sales and housing 
starts reports, plus Friday's CFTC traders update for some price guidance.

   USDA released its weekly Export Sales and Shipments report Thursday morning 
with the following data:

   "Net sales of Upland totaling 156,500 running bales (RB) for 2023/2024 were 
down 38% from the previous week and 7% from the prior four-week average. 
Increases primarily for China (63,600 RB, including 2,500 RB switched from Hong 
Kong), Vietnam (27,600 RB, including decreases of 2,300 RB), Pakistan (22,600 
RB), Turkey (17,100 RB, including decreases of 900 RB), and Indonesia (9,400 
RB, including 2,100 RB switched from Japan), were offset by reductions for Hong 
Kong (2,600 RB) and El Salvador (500 RB).

   "Net sales of 140,600 RB for 2024/2025 were primarily for El Salvador 
(90,800 RB), Mexico (16,100 RB), Honduras (10,200 RB), Bangladesh (6,700 RB), 
and Pakistan (5,700 RB).

   "Exports of 238,800 RB were down 4% from the previous week and unchanged 
from the prior four-week average. The destinations were primarily to China 
(85,000 RB), Turkey (39,900 RB), Pakistan (34,900 RB), Bangladesh (18,500 RB), 
and Vietnam (10,900 RB). Net sales of Pima totaling 3,600 RB for 2023/2024 were 
down 36% from the previous week and 43% from the prior four-week average. 
Increases were reported for India (2,700 RB, including decreases of 2,700 RB), 
Vietnam (400 RB), Germany (200 RB), Turkey (200 RB), and Japan (100 RB).

   "Total net sales of 1,000 RB for 2024/2025 were for Italy. Exports of 5,200 
RB were down 37% from the previous week and 28% from the prior four-week 
average. The destinations were primarily to India (2,700 RB), Vietnam (1,000 
RB), Brazil (400 RB), Pakistan (400 RB), and Thailand (200 RB)."

   Crude oil is somewhat higher Thursday, extending its gains of Wednesday. In 
that previous session, energy prices rose on signs of stronger demand in the 
U.S., including slower inflation. Based on the updated CPI, the Federal Reserve 
may be better motivated to lower interest rates. The EIA's domestic energy 
inventories fell, reflecting a rise in refining activity and fuel demand.

   For Thursday, chart support for December cotton stands at 73.75 cents and 
73.00 cents, with 76.00 and 76.50 as resistance. This morning's estimated 
volume stands at 6,237 contracts. 

    

   Keith Brown can be reached at commodityconsults@gmail.com or by calling 
(229) 890-7780.




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