DTN Cotton Close: Sharply Lower on Poor Sales
DTN Cotton Close: Sharply Lower on Poor Sales

DTN Cotton Close: Sharply Lower on Poor Sales

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By Keith Brown DTN Cotton Correspondent

Cotton was lower amid Thursday’s poor weekly sales and exports data. Current-season 2019-20 sales were 164,000 bales, while new-crop 2011-12 was only a mere 500 bales sold! Contrast that with the business done last week, where weekly sales totaled more than 330,000 bales. On top of that, the market knows not only did the low of the move come on Aug. 5, but that was the very day China announced a halt to all imports of U.S. agricultural imports. So that number is hugely important from not only a chart perspective, but a psychological one as well.

The trend of cotton remains fervently down, which is an understatement. Speculators remain record net short and are now eyeing that Aug. 5 low of 57.25 cents as the next likely target. Thus, closing under that level on a weekly basis at the end of the week will set the tone for a more dour sentiment for next week. Next week is the last week of the month.

Despite the fact the crop may be diminishing in scope, the bigger concern for the market is demand, and although one can argue about demand being decent for the short term, it is the longer-term demand outlook that worries the market and undercuts prices.

Thursday, December cotton settled at 58.94 cents, down 100, March finished at 58.96 cents, minus 80, and December 2020 closed at 62.77 cents, off 48 points. Thursday’s estimated volume was 17,882 contracts.

Πηγή: Agfax



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