By Keith Brown, DTN Contributing Cotton Analyst
The cotton market was slightly disappointed Thursday with the weekly export sales. Although sales and shipments were decent enough, China was a slack participant as it was involved with Golden Week holidays. In addition, traders elected to square positions ahead of Friday’s WASDE, as they kept monitoring the path of Hurricane Delta.
For the crop report, the average industry guess stands at 16.75 million bales. Last month USDA reported the crop at 17.05 million and the month before (August), the agency indicated the crop was 18.0 million bales. Thus, given adversity of Sally and other weather events, some traders are suggesting a crop size under 16.50 million. In addition, domestic exports are expected higher, putting some downward pressure on domestic carryout. World stocks are expected to fractionally decline.
Regarding the Delta, it is expected to make landfall in the middle of Louisiana as category 2 storm. Thus, fierce winds and heavy rains will likely zap much of the cotton crop Hurricane Sally had left behind. According to the National Hurricane Center Louisiana, southern Arkansas and western Mississippi will likely experience 3 to 6 inches of rain, with isolated maximum totals of 10 inches.
Friday afternoon the CFTC will report on the structural makeup of the open interest via its commitment of traders report. In recent weeks the report has shown a strong net long build-up by the managed money funds. As of last count they were effectively long with some 51,000 contracts, which is the equivalent of 5.10 million bales.
As December cotton enters into its Friday trade, it stands 1.67 cents up on the week and 1.70 cents for the month, but 2.87 cents down on the year.
For Thursday, December cotton closed at 67.49 cents, down 0.10 cent, March closed at 68.26 cents, down 0.09 cent and December 2021 ended at 67.17 cents, down 0.12 cent. Estimated volume was 28,325 contracts.