By Keith Brown, DTN Contributing Cotton Analyst
The cotton market hurdled key resistance Wednesday as traders anticipated decent sales numbers Thursday and positive supply-demand calculations. Additionally, there is an ongoing massive rain event pounding the U.S. Delta. To the latter, there have been reports of widespread flooding of cotton fields and municipalities. December cotton posted its second highest close for the history of the contract.
Regarding the export sales, the numbers have been stacking high for many weeks, with China as a major buying participant. We expect sales of 200,000 bales and shipments of 300,000. On the supply-demand, it is likely USDA will lower both domestic and world carryouts via its increasing U.S. exports and showing improving foreign consumption.
In the May World Agricultural Supply and Demand Estimates (WASDE) report, USDA raised exports by 500,000 bales to 16.25 million bales for the 2020-21 marketing year, lowering ending stocks estimates down to 3.3 million bales. Many traders are expecting domestic carryout to submerge under 3.00 million bales.
Wednesday, July cotton closed at 86.62 cents, up 1.48 cents, December settled 87.34 cents, up 1.35 cents and March 2022 ended at 87.22 cents, 1.26 cents higher; estimated volume was 46,833 contracts.