May cotton closed down 0.32 Friday, easing back a third day as outside concerns of trade issues with China moved to a higher level Friday, but did not include cotton as a potential target. Extreme drought in northern Texas remains a concern for cotton production in 2018.
May cotton prices pulled back a third day on Friday, closing down 0.32 at 81.83 and, again, on light volume. Traders were mostly cautious Friday after China proposed trade retaliation for a list of 128 U.S. goods, none of which were cotton. Meanwhile, spot cotton prices remain near their highest levels in three years with a few active weather concerns here in the U.S.
The main concerns are extreme drought in northern Texas and too much rain around the Mississippi Delta. Southern Georgia also remains on the dry side with only light amounts of precip in the seven-day forecast.
Early Friday, USDA said last week’s export sales and shipments of cotton totaled 338,400 and 425,100 running bales, respectively, for 2017-18. That puts total cotton sales up 19% in 2017-18 from a year ago, a bullish increase on the year, provided they get shipped by the end of July.
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 degree of bullishness among speculators remains a bearish concern, should May prices fall below support at 76.44. On the other hand, the 2017 high of 87.18 stands as formidable resistance as traders wait to see how the new U.S. growing season develops.
The ICE daily stocks report showed certified stocks down 2,406 on Thursday at 60,218.
In cash online trading, The Seam showed 1,066 bales sold Thursday at an average price of 60.18 cents. Average loan value was 44.89 cents and 96,197 bales were offered.
The Cotlook A Index of world values for Thursday, Mar. 22 was down 0.50 at 91.95 cents, putting the premium over the May futures settlement at 9.80 cents.