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DTN Morning Cotton Commentary 06/07 07:58
Cotton Lower Ahead of Data
The cotton market is trading lower Wednesday morning as traders adjust their
positions in front of several cotton events.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is trading lower Wednesday morning as traders adjust their
positions in front of several cotton events. Those items include Thursday's
weekly exports-sales and Friday's option expiration, as well as fresh
supply-demand updates.
On Thursday at 8:30 a.m. EDT, USDA will issue its weekly export sales
report. Last week, sales were a strong 267,000 bales, with China in as the
buyer of 221,000 bales. Shipments of 283,000 were slightly lower.
On Friday, options for the spot July contract will expire at the closing
bell. The contract will enter delivery on June 26.
Friday, USDA will publish its June WASDE. The current expectation calls for
U.S. 2023/24 production to be 16.35 million bales, up from 15.50 million seen
in May. U.S. ending stocks are expected to be 3.60 million bales versus 3.30
million reported in May. World production is expected to be around 116.46
million bales versus 115.69 million last month, and world carry is expected to
be 93.09 million bales versus 92.28 million in May.
Weather for West Texas calls for some light rain in its one-to-five-day
forecast. However, now the six-to-ten and the 8-to-14-day outlooks indicate
increasing chances for above normal temperatures and below normal
precipitation. If such hot and dry conditions indeed return, then any improved
conditions stemming from the recent rains stand to be negated.
For Wednesday, closed-in support for July cotton stands at 84.60 cents and
84.00 cents, with 86.00 cents and 87.16 cents as resistance. Wednesday's
estimated morning volume is 9,924.
Keith Brown can be reached at commodityconsults@gmail.comor by calling (229)
890-7780.
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