By Keith Brown, DTN Contributing Cotton Analyst
The cotton market was markedly lower Thursday as end-of-the-month squaring and weaker outside markets encourage certain speculative selling. With high open interest, the cotton market looks vulnerable to a serious correction over the next few days. Over the past two weeks, CFTC market data has shown a reduction in bullish positions held by the trend-following funds. Thus, lacking any recent new highs in the ICE Futures, some of those traders have turned into more willing sellers. Also, setbacks in the Chicago grains equally discouraged cotton traders from increasing their buying.
Coming into Thursday morning’s weekly export-sales report, cumulative sales for the 2020-21 season had already reached 12.16 million bales, the highest since 2010-11. Given Thursday’s sales were 322,000 bales, up 105 over last week, will only augment the running export-sales totals. Currently sales stand at 83% of the USDA’s forecast for the marketing year versus a five-year average of 73%.
Heading into Friday’s trading session, spot March cotton is down 1.63 cents on the week, but up 1.81 cents for the month.
For Thursday, March cotton settled at 7.99 cents, down 0.91 cent, July finished at 82.06 cents, down 0.80 cent and December closed at 77.50 cents, down 0.58 cent; estimated volume was 41,684 contracts.