Keith Brown DTN Contributing Cotton Analyst
The cotton market nearly threatened its 500-point limit down level Friday as its prices melted under new COVID fears. Overnight, an alleged new strain of the virus appeared in South Africa. Its announcement caused several countries to halt air travel from South Africa to the UK and continental Europe. The Dow Jones collapsed over 1,000 points amid panic selling, the worst drop of 2021.
USDA issued its delayed weekly export sales and shipments report. Overall, the numbers would have been supportive if Friday had been an ordinary day. The following is a website summary: Net sales of 196,900 running bales (rb) for 2021/2022 were up 44% from the previous week and 3% from the prior four-week average. Increases primarily for China (58,500 rb), Vietnam (44,500 rb, including 400 rb switched from South Korea, 100 rb switched from Japan, and decreases of 500 rb), Pakistan (34,200 rb), Turkey (20,100 rb), and Bangladesh (16,700 rb), were offset by reductions for South Korea (500 rb) and El Salvador (300 rb). Net sales of 46,200 rb for 2022/2023 were reported for Bangladesh (19,800 rb), Turkey (13,200 rb), China (8,800 rb), and Pakistan (4,400 rb). Exports of 97,100 rb were up 25% from the previous week and 5% from the prior four-week average. The destinations were primarily to China (35,100 rb), Mexico (20,900 rb), Vietnam (13,300 rb), South Korea (4,100 rb), and Bangladesh (3,700 rb). Net sales of Pima totaling 18,100 rb were down 12% from the previous week, but up 7% from the prior four-week average. Increases were primarily for China (10,100 rb), Peru (2,700 rb), Thailand (2,000 rb), India (1,100 rb), and Vietnam (900 rb). Total net sales of Pima totaling 1,300 rb for 2022/2023 were for Egypt. Exports of 6,300 rb were down 4% from the previous week and 3% from the prior four-week average. The destinations were to India (2,900 rb), China (2,000 rb), Peru (900 rb), Bahrain (300 rb), and Italy (100 rb).
The CFTC will release its Commitments of Traders data on Monday. Last week saw a big jump in the bullish positions of the managed-money funds. Of course, Monday's report will reflect data as of this past Tuesday, thus Friday's bearish calamity will not figure into the numbers.
Spot December cotton remains in its delivery process. There were no deliveries Friday. It expires on Dec. 8.
Friday, December settled at 116.60 cents, off 3.78 cents, March ended at 111.78 cents, down 4.00 cents, and December 2022 ended at 89.77 cents, down 1.99 cents. Friday's estimated volume was 35,185 contracts.
Keith Brown can be reached at commodityconsults@gmail.com