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DTN Closing Cotton 05/02 13:32
Cotton Higher Friday as China Hints About Trade Deal Possibility
Cotton futures were dramatically higher Friday as the hopeful trade comments
from China lifted many markets.
Keith Brown
DTN Contributing Cotton Analyst
Cotton futures were dramatically higher Friday as the hopeful trade comments
from China lifted many markets. Overnight, Beijing let it be known that it is
willing to "entertain the possibility of talks." Such is a step in the right
direction. With that news, plus cotton's already oversold technical condition,
its prices snapped higher.
At 3:30 p.m. EDT Friday, the CFTC will update its Commitments of Traders
standings. Last week the managed-money funds had bought 4,900 contracts to
reduce their net-bearish carry to some 37,000 positions.
Weatherwise, West Texas planting prospects are improving with its recent
rains and more in the forecast. Field conditions in the Delta have been
improving recently, but the return of significant rain this weekend and again
later next week may set back fieldwork again. With that, the 6- to 10-day
forecast, valid from May 7 to May 11, indicates much-above normal rain for
Texas, normal for the Delta, and below-normal for the Southeast. For
temperatures, Texas looks to be much below normal, while the Delta and the
Southeast appear to have slightly above opportunities.
The U.S. dollar was lower Friday after the jobs report reflected more new
jobs than expected. The report reinforced expectations that the Federal Reserve
will hold interest rates steady for the next few meetings and not cut them
until probably the summer. The report showed that nonfarm payrolls increased by
177,000 jobs. Estimates had called for 130,000 jobs.
On Monday, USDA will issue its weekly crop progress report. Last week had
the 2025 cotton crop at 15% planted, right on schedule, but also had Texas
ahead of normal at 21% planted.
For Friday, May cotton settled at 7018 cents, up 457 points; July cotton
ended at 68.41 cents, plus 275 points; and December finished at 69.71 cents,
228 points higher. Friday's estimated volume was 66,854 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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