May cotton closed down 0.49 cent Wednesday, pulling back a bit with rain getting closer to northern Texas in the latest seven-day forecast. Extreme drought in northern Texas remains a concern for 2018 production.
May cotton followed Tuesday’s bullish outside daily reversal with a modest pullback on Wednesday, ending down 0.49 cent at 82.59 cents a pound. The market is dealing with ongoing concerns about extreme drought in northern Texas, but Wednesday’s seven-day forecast showed moderate to heavy rain amounts anticipated just east of northern Texas — getting closer to possible relief.
Other features of Wednesday’s forecast showed more rain headed to the Mississippi Delta where flooding has already been a problem in early 2018. Lighter rain amounts are in store for the Carolina coasts while southern Georgia remains mostly dry.
Technically speaking, May cotton remains in an uptrend with overwhelming support from noncommercial buyers, seen as 90% long in the CFTC’s most recent report for Mar. 13. That level of bullishness among speculators remains a bearish concern, should May prices fall below support at 76.44 cents.
The ICE daily stocks report showed certified stocks down 7,628 on Tuesday at 69,167.
In cash online trading, The Seam showed 13,607 bales sold Tuesday at an average price of 69.85 cents. Average loan value was 47.31 cents and 103,080 bales were offered.
The Cotlook A Index of world values for Tuesday, Mar. 20 was down 1.35 points to 90.75 cents, putting the premium over the May futures settlement at 7.67 cents.