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DTN Closing Cotton 08/19 13:34
Cotton Posts New Highs Wednesday
The cotton market zoomed past its May spring high of 88.08 cents Wednesday
amid increasing adverse growing conditions.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market zoomed past its May spring high of 88.08 cents Wednesday
amid increasing adverse growing conditions. Traders note that the Texas dryland
crop is in serious trouble and expect abandonment rates to run higher than
first anticipated. Moreover, there are weather concerns for India and China.
Thursday at 8:30 a.m. EDT, USDA will issue its weekly export sales.
Previously, sales were 126,000 bales, while shipments were 146,000 bales. Both
categories were below expectations.
On Friday afternoon, the CFTC will update its Commitment of Traders numbers.
Last week saw the managed-money funds net buy 10,500 positions, swelling their
net-long carry to 72,870 contracts.
According to USDA's Foreign Agricultural Service (FAS), world cotton mill
use is projected to reach 121.95 million bales in 2026-27. If realized, that
would be an increase of about 2 million bales from 2025-26, resulting in the
highest level since the 2017-18 marketing year. This increase marks the fourth
consecutive year of growth in global mill use. That increase is concentrated in
a handful of foreign countries. China's mill use is forecast at 41.5 million
bales, up 500,000 bales and the highest since 2020. China remains the largest
supplier of apparel products to the world.
The U.S. dollar was materially lower Wednesday as the U.S. Treasury
Department announced an increased buyback of longer-term debt. On Tuesday,
long-term yields posted a 20-year high as investors demanded a better return to
finance the federal deficit.
For Wednesday, December closed at 88.35 cents, up 294 points; March 2027
finished at 90.14 cents, plus 293 points; and July 2027 settled at 90.24 cents,
243 points higher. Wednesday's estimated volume was 71,522 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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