DTN Cotton Close: Lower on Weather, Grains Decline

DTN Cotton Close: Lower on Weather, Grains Decline

By Keith Brown, DTN Cotton Correspondent

The cotton market was smartly lower Monday as the updated weather forecast continues to show improved chances for rain in the West Texas area. The 6- to 10-day outlook has more rain in its forecast. However, cotton is a highly water responsive crop and sometimes a bit of rain can do more damage than good.

Another negative for cotton Monday was the big retreat over in the Chicago grain futures. Corn, soybeans and wheat all suffered double-digit losses, as they too fell victim to improving weather outlooks… plus the fact they are hugely technically overbought.

Monday at 3 p.m. CDT, USDA will issue its weekly Crop Progress report. Last week cotton’s plantings were 16% compared to the five-year average of 16% complete. However, of late parts of the U.S. Delta have become overly wet, halting some fieldwork. Moreover, the last upsurge in corn may have enticed more acres out of cotton.

For the balance of the week, traders will key in on two other major reports. First is the May Crop Report out at 11 a.m. CDT Wednesday, and Thursday’s weekly export sales report. For the May supply-demand data, traders would want to see an uptick in the export category, which in turn should lower domestic stocks. For the export report, decent sales and a strong shipment number ought to help the psyche of the market.

Monday, July cotton closed at 88.47 cents, down 1.19 cents; December settled at 86.10 cents, down .79 cent; March (2022) ended at 85.48 cents, down .44 cent. Monday’s estimated volume was 26,472 contracts.


Source: Agfax
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