By Keith Brown DTN Cotton Correspondent
The cotton market finished disappointingly lower Thursday amid outstanding exports-sales data. As reported by USDA, weekly sales of 350,000-plus was the second marketing-year-high report of the last three weeks.
Additionally, sandwiched in between those huge sales were last week’s marketing year-high for shipments. Nonetheless, market participants chose to ignore this strong business, opting to trade the unknown fear of the coronavirus.
Heading into Friday’s session, spot cotton is unchanged for the week. Given all the rigmarole caused by the Wuhan virus this week, one might have thought prices might have been worse. Of course, there is one more session for the week.
To that point, Monday is a federal holiday (Presidents Day) and the market will be closed. Thus, it may be a tad too scary for any new buyer to step in ahead of a three-day weekend.
On Saturday, the NCC will end its convention by announcing its membership survey regarding 2020 acres. We will have that number in our next update on Tuesday morning.
The current seasonal sales pace for the 2019-20 marketing year is the strongest since the 2010-11, and prior to Thursday’s bullish report, stands at 85% of USDA’s forecast. Still, it was considered bearish when USDA did not raise its exports category inn this week’s monthly supply-demand data.
Some 2.50 million of cotton exported from India to China has been temporarily place on hold. Sub-continent exporters hope the situation to be a momentary event, and not affect the total amount of exports anticipated for the current season.
Last month, Indian exporters had signed a deal for exporting 700,000-800,000 bales of cotton to China, of which 400,000 bales are already exported, according to news-wire reports. The order for the remaining bales may get cancelled if the virus outbreak continues for a few more weeks.
Some Indian merchants are already seeking alternative customer destinations. Most Chinese textile factories have drastically scaled back operations or completely shutdown in efforts to contain the virus. Obviously, given Thursday’s news of increasing infections, it’s not clear about when those workers will return to those factories.
For Thursday, March cotton closed at 67.75 cents, down 0.83 cent, July was 69.50 cents, down 0.57 cent and December finished at 69.34 cents, down 0.48 cent. Thursday’s estimated volume was 64,469 contacts, the highest level thus far this week.
