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DTN Closing Cotton 02/13 13:33
Cotton Softens Into Weekend
The cotton market traded lower today, albeit on less volume, as traders seem
content to ease out of some positions ahead of the three-day holiday.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market traded lower today, albeit on less volume, as traders seem
content to ease out of some positions ahead of the three-day holiday.
Additionally, some producers were fixing cash contracts on Spot March, while
others were selling and rolling their contractual obligations forward. Other
upcoming reports and events of note are the CFTC update, China's week-long
holidays, and March cotton's delivery.
As mentioned, today at 3:30 p.m. EST, the CFTC will update its Commitment of
Trader data. Last week, the managed-money funds sold some 6,700 positions,
swelling their net-short position to 71,700 contracts. The record is
81,000-plus, which might be challenged in this report.
Next week, China will celebrate her Lunar New Year holidays, meaning that
much of the nation's businesses will be closed. Typically, a large part of the
Chinese population will travel to their ancestral homes for family gatherings
and celebrations.
Monday will commence the delivery process for March cotton. Any producer
tied to the March contract must either flatten or roll by the preceding Friday,
Feb. 20, to avoid the delivery process. Current open interest for Spot March is
70,520 contracts.
The Climate Prediction Center continues to show large swaths of U.S.
agricultural production areas with varying degrees of drought conditions. For
cotton, the agency's current reading is 81% drought versus the previous level
of 80%.
The market will be closed this Monday in observance of Presidents Day.
Trading will resume at 9 p.m. EST Monday night as normal. However, all
government reports for next week will be delayed by one day.
For Friday, July closed at 65.82 cents, off 16 points; December 2026 closed
at 68.36 cents, minus 9 points; and March 2027 finished at 69.44 cents, plus 1
point higher. Friday's estimated volume was 82,685 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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