By Keith Brown DTN Cotton Correspondent
The cotton market was higher Monday as traders positioned themselves ahead of USDA monthly supply-demand report. That data will be released Tuesday at high noon. Expectations call for little changes to cotton’s general economic picture.
Yet, we are thinking a slight increase in exports is possible. Of late, old crop sales and exports have dramatically picked up, even though China has been an absentee customer for some time. In fact, the market is barely off the five-year sales pace for this time of year. To that end, May cotton nearly inverted over July Monday. We will be detailing that market aspect in our daily marketing letter entitled cotton a.m. Tuesday morning.
The USDA attache issued a report suggesting Mexico’s cotton plantings for 2019-20 will remain close to 2018-19 levels. There is expected in Chihuahua offsetting reductions in other states due to poor weather conditions. Despite these regional problems, the forecast reflects continued competitive prices for cotton compared to other crops like wheat, sorghum and corn. Moreover, with normal weather and low pests infestations, production forecasts for 2019-20 total suggest a cotton crop of some 1.7 million bales or a 2.3% increase over the previous marketing year.
May cotton settled Monday at 78.92 cents, up 0.67 cent, July was 79 cents, up 0.41 cent and December finished at 77.16 cents, 0.27 cent higher. Volume on Monday’s session was a hefty 62,000 plus contracts.
