Keith Brown DTN Contributing Cotton Analyst    

The cotton market was moderately lower Wednesday amid some disappointment crop updates in February WASDE. Global stocks were slashed some 850,000 bales, but the U.S. crop was left unchanged. Then the tabulators saw fit to lower domestic usage 200,000 bales, which in turned increased domestic carry out to 4.30 million bales. The market declined over a hundred points but then pared those losses into the settlement.    

A summary of the report for USDA is as follows: The 2022-23 U.S. cotton supply and demand forecasts show slightly lower mill use and higher ending stocks relative to last month, while production and exports are unchanged. The mill use forecast lowered 100,000 bales to 2.1 million on recent lower rates of monthly utilization. The upland cotton marketing year average price received by producers is projected at 83 cents per pound, unchanged from January. WASDE world 2022-23 cotton ending stocks are 850,000 bales lower this month as expected output falls 1 million bales and consumption is projected 190,000 lower. India's crop is reduced 1 million bales as a continued slow pace of market arrivals tempers previous optimism, and Franc Zone production is 600,000 bales lower this month due to insect damage this season. China's crop is raised 500,000 bales on a record pace of Xinjiang inspections in January, and Pakistan's is raised 200,000 bales on favorable arrivals data. World 2022-23 consumption is 200,000 bales lower this month as a 500,000-bale increase for China is more than offset by reduced expectations for Indonesia, Pakistan, the United States, and Vietnam. World trade is projected 1.3 million bales lower, with prospective imports lower for Pakistan, Indonesia, Egypt, and Bangladesh.    

On Thursday, USDA will issue its latest weekly export sales. Last week saw sales of 171,000 bales, with China the dominant buyer. Shipments were slightly off but still a decent 212,000 bales were exported.    

Options on March futures expire this Friday. Also, Tuesday's volume was a whopping 90,000 plus contracts! One has to go back to February 2021 to find a greater amount -- it was 103,000-plus back then.    

Wednesday, March 2023 finished at 85.37 cents, down 0.26 cent, July settled at 86.64 cents, down 0.42 cent and December 2023 ended at 85.30 cents, 0.52 cent lower; estimated volume was 57,806.      

Keith Brown can be reached at commodityconsults@gmail.com 

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