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DTN Closing Cotton 08/12 13:38
WASDE, Production Reports Disappoint Cotton Market
The cotton market fell from its 85.25 cent high on Wednesday amid lackluster
supply-demand numbers.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market fell from its 85.25 cent high on Wednesday amid lackluster
supply-demand numbers. Traders will look at Thursday's export sales and
Friday's CFTC update for further price insights.
USDA lowered its forecast for U.S. production and ending stocks from its
July estimates, but not as much as expected. A decline in yield was almost
offset by increases in planted and harvested area. World ending stocks were
lower than expected. The report placed U.S. 2026/27 cotton production at 13.61
million bales versus an average trade expectation 13.54 million bales versus
the 13.70 million bales in the July update. Average yield came down to 798
pounds per acre versus 872 in July, but planted area was raised 6% from last
month and harvested area by 8%. Exports came in at 12.30 million bales versus
12.30 million bales expected (range 12.10-12.70 million) and 12.30 million
bales in July. Ending stocks were 4.00 million bales versus 3.86 million bales
expected (range 3.10-4.30 million) and 4.10 million bales in July. The
stocks/use ratio is now at 28.8% versus 29.5% in July, 30.5% last year and a
five-year average of 27.1%.
Thursday at 8:30 a.m. EDT, USDA will issue its weekly export sales report.
Last week saw net sales for the 2026/2027 season of 352,400 bales. The top
buyers included Vietnam (245,500), India (42,200) and Pakistan (18,400).
Shipments tallied 233,800 bales, which was down 15% weekly. The primary
destinations were Vietnam (78,600), Pakistan (49,400), Indonesia (18,000),
Turkey (12,700) and Mexico (12,400). The data will be out at 8:30 a.m. EDT.
Also on Friday, the CFTC will update its Commitment of Traders numbers. Last
week saw the managed-money funds net buy 9,800 positions, swelling their
net-long carry to 62,279 contracts.
Crude oil was relatively quiet Wednesday even after Iran-backed Houthi
rebels killed six people in an attack on a cargo ship in the Red Sea. Then, the
U.S. Navy fired on a container ship that allegedly tried to break the blockade
of Iranian ports in the Gulf of Oman. The incidents underscore the growing
impact of the nearly six-month-old war on two key global shipping routes.
For Wednesday, December closed at 84.38 cents, down 1 point; March 2027
finished at 86.32 cents, plus 8 points; and July 2027 settled at 87.04 cents,
30 points higher. Wednesday's estimated volume was 55,195 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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