By Dana Mantini, DTN Senior Analyst
There is little doubt that cotton, along with other U.S. ag futures markets, are being adversely impacted by the growing panic and fears of a world economic slowdown due to COVID-19. The world has now seen 101,733 people infected with the coronavirus, according to Johns Hopkins University, with 3,460 deaths. The U.S. has had just 260 cases confirmed, and 12 deaths.
May cotton futures finished just 0.56 cent lower to end the day on Friday but closed 1.3 cents higher for the week. A marketing-year-high export sales number of 395,500 running bales last week was the catalyst for strength this week. Vietnam and Turkey were the two largest buyers. The export sales were 40% above the four-week average. Trade with China, however, continues to be subdued, as many factories had closed over there and are just getting back to full strength.
Funds are still thought to be net long nearly 8,200 contracts of cotton, but the May contract is sitting just 2 1/2 cents above the recent low.
Next week’s USDA report will give a new peek into the supply situation. The sharp fall in both energies and equities is providing a massive headwind to ag commodities, but China’s granting of duty-free import licenses could soon result in phase one buying.
Dow Jones reports that the Cotlook A” Index for March 5 was up 0.25 at 72.30 cents/pound.
Source: Agfax