Keith Brown DTN Contributing Cotton Analyst
The cotton market traded somewhat positive to negative for most of the Thursday session. Traders were keying on the export-sales report, while making adjustments for Friday's June WASDE and Spot July's options expiration. The market was also helped by a falling US Dollar, amid the largest jobless claims report in two years.
Initially, cotton traders were stunned by the massive, marketing-year high export-sales report issued Friday morning. USDA reported old crop sales of nearly one-half million bales, with China taking the lion's share of 385,000. Shipments were higher, week over week.
Friday morning, USDA will update its supply-demand tables. Based on the expectations, traders are anticipating a bearish report. The average industry guess has the 2023-24 U.S. crop at 16.35 million bales, up from 15.50 million reported in May. Domestic ending stocks are expected to be 3.61 million bales, versus 3.30 million seen last month. World production is anticipated to increase to 116.46 million bales, compared to the 115.70 million of last month, while World carryout should be at 93.09 million bales versus 92.28 million seen in May.
The latest U.S. Drought Monitor was released Thursday morning, and it showed improved features for West Texas. Last week's drought monitor showed about 28% of U.S. cotton production was in an area experiencing drought, mainly in West Texas.
Lastly, options for the July contract are set to expire with Friday's settlement. It will soon enter delivery on June 26.
Thursday, July settled at 84.31 cents, down 0.70 cent and December 2023 ended at 81.63 cents, 0.40 cent higher. Estimated volume was 70,428 contracts.
Keith Brown can be reached at firstname.lastname@example.org
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