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DTN Morning Cotton Commentary 05/13 06:38
Cotton Ricochets Higher Wednesday
After its late-session pummeling, the cotton market is moderately higher
Wednesday.
Keith Brown
DTN Contributing Cotton Analyst
After its late-session pummeling, the cotton market is moderately higher
Wednesday. Tuesday's supply-demand update was superficially positive, but still
lacked reality. Traders will await Thursday's export sales numbers and then the
results of the Trump/Xi meeting on Thursday/Friday.
Highlights from Tuesday's May WASDE include 2026-27 production at 13.30
million bales versus an average trade expectation 13.76 million (range 13.00
million to 14.51 million), versus the 13.90 million seen in 2025-26. Plantings
were forecast at 9.64 million acres versus 9.28 million as per the May
Prospective Plantings report, but the abandonment rate was estimated at 23.4%,
which is down from 25.6% in 2025-26 but is close to the 10-year average of
23.5%. Exports were 12.30 million bales versus 12.27 million, and ending stocks
were 3.90 million bales versus 4.20 million expected and compared to the 4.40
million of 2025-26 season.
On Thursday at 8:30 a.m. EDT, USDA will release its latest export sales
numbers. Last week saw net sales of 123,000 bales, off some 24% weekly and
shipments of 327,000 bales, down 15% week-over-week.
Starting Thursday, the Trump/Xi trade meeting will take place in Beijing.
The two sides have much to discuss including tariffs, Taiwan, Iran, rare
earths, and U.S. agricultural purchases. Most analysts have low expectations.
Also on Friday, the CFTC will update its Commitments of Traders numbers.
Last week, the managed-money funds bought some 12,000 positions, lifting their
net-long carry to 51,184 contracts. The all-time record bullish record stands
at 108,788 contracts.
Chart support for July cotton stands at 85.25 cents and 84.75 cents, with
resistance around 88.00 cents and 88.50 cents. Wednesday morning's estimated
volume is 15,250 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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