Keith Brown DTN Contributing Cotton Analyst
The cotton market was lower Friday as bearish outside influences discouraged buyers. To that end, banking stocks have been battered in the last two weeks following the sudden failures of two U.S. lenders and the emergency sale of embattled Swiss bank Credit Suisse to rival UBS. Then, overnight, Deutsche Bank was thought to be in trouble. With that the U.S. stock market weakened.
From the weekly export-sales, we note that cumulative sales for 2022-23 have reached 11.179 million bales, below the 13.96 million of last year, the lowest for this time of year since the 2015-16 season. The largest buyer of U.S. Cotton was Vietnam (116,615), with China a close second at 95,941 bales. China does have the largest commitments for this marketing session at 2.241 million bales, followed by Pakistan at 1.961 million. However, for political and financial reasons, those two countries are living up to their expectations.
Next Friday, March 31, USDA will publish its acres intentions survey for 2023 production. Several private groups are forecasting a sharp reduction, perhaps as much as 20% or more, for the new crop market.
Friday afternoon, the CFTC will update its Commitments of Traders data. Currently, the agency indicates that the managed money traders are net short some 13,653 contracts. Friday's data should verify that position.
The U.S. dollar was higher Friday given the banking troubles unfolding in Europe. Global Investors are sometimes moving quickly among the various flight-to-quality havens, which includes the dollar, the yen, or gold.
May cotton is down 1.29 cents for the week, off 7.49 cents on the month, and minus 6.91 cents on the year.
Friday, May 2023 finished at 76.54 cents, down 1.04 cents, July settled at 77.17 cents, down 1.02 cents and December 2023, ended at 78.40 cents, 0.86 cent lower; estimated volume was 36,250 contracts.
Keith Brown can be reached at email@example.com
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