By Keith Brown, DTN Contributing Cotton Analyst
The cotton market ended Wednesday lower as traders took profits ahead of Thursday’s weekly export sales report.
The cotton market ended Wednesday lower as traders took profits ahead of Thursday’s weekly export sales report. The market has been experiencing a strong run up over the past few weeks as it worked off its heavily oversold conditions. Additionally, the market has seen several weeks of huge Chinese purchases that has been shaking-up the shorts. However, the constant bickering and fingering pointing between China and the U.S. over the coronavirus issues remains a thorn in the side of the market.
The latest weather forecasts has most of the country with above normal temperatures, with the exception of Texas, which is below. Rainfall chances for the next six-to-10 days is above normal rainfall for the much of the country. South Georgia, which has been unduly dry, is receiving some scatter rains Wednesday, However, Thursday’s update to the drought monitor may show a more insightful picture. To that end, the data cutoff for Drought Monitor maps is each Tuesday at 8 a.m. EDT. The maps, which are based on analysis of the data, are then released each Thursday at 8:30 a.m. EDT.
A quick summary of the most recent government support has the May 18 Cotlook A index was 45 points higher to 66.75c/lb. The AWP for cotton for this week is 47.36 cents/lb. The LDP is 4.64 cents/lb. Cotton producer’s unpriced 2019 crop inventory as of Jan. 15 is eligible to receive CFAP payments. The payment will include a 9 cent/lb rate for half of the inventory from the CARES act and a 10 cent rate for the other half from the CCC. Producers could apply 9.5 cents/lb to the applicable inventory. The CFAP payments are limited to $250,000/person. Signup begins May 26.
July cotton closed at 58.21 cents, down 0.99 cent, December ended at 58.79 cents, down 0.38 cent and March finished at 58.58 cents, down 0.26 cent. Estimated volume was 26,122 contract traded.