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DTN Morning Cotton Commentary 03/26 07:45
Cotton Nudges Overhead Resistance
The cotton market continues to press against 73-cent resistance and traders
are somewhat looking to next week's acreage intentions and the already
super-dry U.S. growing area.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market continues to press against 73-cent resistance and traders
are somewhat looking to next week's acreage intentions and the already
super-dry U.S. growing area. Of course, the U.S./Iran War is demanding the
immediate attention of traders who are, understandably, nervous and distracted.
Traders will assess Thursday's export sales, Friday's CFTC update, and next
Tuesday's Prospective Plantings report for direction.
USDA just released its weekly export sales report with the following
numbers: "Net sales of Upland totaling 202,400 RB for 2025/2026 were up 3
percent from the previous week, but down 5 percent from the prior 4-week
average. Increases primarily for Vietnam (91,400 RB, including 900 RB switched
from South Korea), Pakistan (24,000 RB), Turkey (17,400 RB, including decreases
of 200 RB), Indonesia (12,400 RB), and China (11,200 RB, including 900 RB
switched from Vietnam and decreases of 100 RB), were offset by reductions for
El Salvador (2,600 RB) and Honduras (100 RB). Net sales of 27,000 RB for
2026/2027 were reported for Peru (12,800 RB), Honduras (10,000 RB), Thailand
(2,600 RB), Japan (1,300 RB), and Guatemala (300 RB). Exports of 400,600 RB --
a marketing-year high -- were up 46 percent from the previous week and 43
percent from the prior 4-week average. The destinations were primarily to
Vietnam (164,100 RB), Pakistan (60,500 RB), Bangladesh (40,300 RB), India
(27,400 RB), and Turkey (26,600 RB). Net sales of Pima totaling 30,900 RB for
2025/2026 -- a marketing-year high -- were up noticeably from the previous week
and from the prior 4-week average. Increases were primarily for Vietnam (21,800
RB), India (4,800 RB), China (3,300 RB), Pakistan (500 RB), and Bangladesh (400
RB). Exports of 7,800 RB were up 49 percent from the previous week, but down 22
percent from the prior 4-week average. The destinations were primarily to India
(3,300 RB), China (1,500 RB), Bangladesh (1,300 RB), Pakistan (1,000 RB), and
Indonesia (200 RB)."
Friday CFTC will issue its Commitments of-Traders report. At last count,
CFTC reported managed-money funds were net short some 40,000 positions, about
one-half their record peak of 81,000-plus contracts. The report will be issued
at 3:30 p.m. EDT.
As previously mentioned, two major U.S. banks are now forecasting reduced
U.S. yields due to reduced fertilizers availability and higher costs.
Disruptions to nitrogen fertilizer supply through the Strait of Hormuz is the
culprit. Fertilizer shortages may lead to growers cutting corners on marginal
land. The Fertilizer Institute reports U.S. farmers typically import up to 50%
of urea fertilizer, but this year the supplies are hovering around 25% below
typical levels.
USDA will issue its Prospective Plantings report on March 31. This will be
the first official look at 2026 acres. The survey will be released at noon EDT.
Chart support for July cotton stands at 69.45 cents and 68.80 cents, with
resistance around 70.80 cents and 71.25 cents. Thursday morning's estimated
volume is 12,675 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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