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DTN Morning Cotton Commentary 05/20 08:10
Cotton Lower, Traders Square the Week
After a lot of two-sided gyrations, traders are balancing their positions
for the weekend.
Keith Brown
DTN Contributing Cotton Analyst
After a lot of two-sided gyrations, traders are balancing their positions
for the weekend. Thursday, spot July spiked higher on mill fixation buying,
while December was lower on ideas that late weekend rains would hit portions of
West Texas.
From Thursday's weekly export sales report, we note that sales have reached
107% of the USDA's forecast for the marketing year versus a five-year average
of 106%. India was the largest buyer this week at 47,307 bales. It is thought
India's cotton crop is much smaller than officially projected.
The weekly Crop Monitor showed that much of Texas is still suffering extreme
to exceptional drought. Temperatures have been inordinately hot, further drying
soils and stressing crops. However, the Lubbock area has an improved chance for
rain from Sunday night into Wednesday morning. The Southeast is anticipating
much needed weekend rains as well.
Chinese authorities are set to re-open Shanghai from its COVID lockdown.
Soon residents will be allowed to go out to shop for groceries for the first
time in nearly two months. In addition, the port of Shanghai, the largest
container port in the world, will re-open in stages,
Friday at 3:30 p.m. EDT, CFTC will update its various traders' categories.
At last count the closely-watched managed-money funds had sold some 1900 long
positions, lowering their bullish net position to 70,700 contracts.
For Friday, support for the July contract stands at 143.00 cents and 142.50
cents, with resistance at 148.90 cents and 149.50 cents. The estimated morning
volume is 4.167 contracts.
Keith Brown can be reached at commodityconsults@gmail.comor by calling (229)
890-7780.
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