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DTN Closing Cotton 05/08 13:38
Cotton Market Climbs on China Hopes and Strong Jobs Report
The cotton market punched out new highs for the move today amid hopes that
China will indeed pursue U.S. agricultural products next week.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market punched out new highs for the move today amid hopes that
China will indeed pursue U.S. agricultural products next week. In addition,
traders liked this morning's better-than-expected jobs report. Lastly today,
the CFTC may exert some positive influence on next week's trading action.
This morning, the Labor Department reported higher-than-expected jobs
numbers. Original estimates called for 55,000 to 80,000 new non-farm jobs, but
the actual number was 115,000.
Later today, at 3:30 p.m. EDT, the CFTC will update its Commitment of
Traders information. Last week, the report showed that the managed-money funds
bought some 3,800 positions, strengthening their net-long carry to 38,355
contracts.
This week's updated U.S. Drought Monitor did not budge in its drought
conditions. Thus, 98% of the U.S. cotton production was still experiencing
drought, the same as the previous two weeks. Last year, the reading was 38%
drought.
This week's export sales report revealed that U.S. cotton sales were the
smallest since Jan. 1. Accordingly, President Trump is scheduled to meet with
Chinese President Xi Jinping during his visit to Beijing next week, and traders
are on the lookout for any Chinese announcement of buying U.S. agricultural
products.
Next week, traders will see new crop progress numbers on Monday, May WASDE
on Tuesday, and the outcome of the Trump/Xi trade meeting on Wednesday/Thursday.
For Friday, July closed at 84.73 cents, up 173 points; December 2026 closed
at 85.46 cents, plus 177 points; and March 2027 finished at 86.13 cents, 172
points lower. Friday's estimated volume was 66,595 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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