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DTN Closing Cotton 01/06 13:34
Cotton Up on FOMO?
The cotton market finished higher today amid short covering as well as a
flurry of new technical buying.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market finished higher today amid short covering as well as a
flurry of new technical buying. One situation likely unfolding is that the crop
is leaving the emotional hands of farmers and being taken in by the
non-emotional hands of merchants. Also, among traders there may be an element
of FOMO (fear of missing out) being enacted.
Monday's export sales report now has USDA caught up in its shutdown-delayed
information. The next export sales report will be this Thursday, Jan. 8, at
8:30 a.m. EST. Sales are still running the lowest in 11 years and have only
reached 58% of USDA forecasts versus a five-year average of 75% for this point
in the marketing year. This suggests that USDA could lower its forecast in the
upcoming WASDE.
With that, this Monday, Jan. 12, USDA will issue its monthly supply-demand
update. As implied, U.S. exports could be reduced, but also the 2025 crop might
see a small retraction. The report will be at noon EST. Estimates will come
later in the week.
The 6- to 10-day weather forecast calls for normal temperatures for the
Southeast, Delta and central Texas. The Texas Panhandle looks to experience
above-normal temps. Rain wise; the entire U.S. Cotton Belt will be saddled with
below to much-below normal precipitation.
For Tuesday, March went out at 65.06 cents, up 41 points; July was 67.74
cents, plus 43 points; and December closed at 69.06 cents, 46 points higher.
Tuesday's estimated volume was 90,224 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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