by Keith Bearden
Taking its trading cue from a collapsing Dow Jones, the cotton market is sharply lower Thursday. The Dow is retreating on renewed concerns Covid-19 might resurrect across parts of the nation. This fear is negating the positive effects of a very strong weekly export sales report from Thursday morning.
The text of that report is as follows: Net sales of 399,600 RB for 2019/2020 were up noticeably from the previous week, also up noticeably from the prior 4-week average.
Increases for China (209,500 RB, including 2,200 RB switched from Vietnam and decreases of 28,700 RB), Vietnam (176,200 RB, including 2,000 RB switched from South Korea), Pakistan (13,200 RB), Turkey (11,100 RB), and Thailand (100 RB, including decreases of 900 RB), were offset by reductions primarily for Malaysia (5,300 RB), Bangladesh (2,800 RB), and South Korea (2,000 RB).
For 2020/2021, net sales of 193,400 RB were primarily for China (161,700 RB), Vietnam (22,000 RB), Malaysia (5,300 RB), and Bangladesh (3,500 RB). Exports of 294,300 RB were up 24 percent from the previous week and 18 percent from the prior 4-week average.
Exports were primarily to China (86,400 RB), Vietnam (67,400 RB), Turkey (56,500 RB), Pakistan (32,400 RB), and Bangladesh (15,800 RB).
Net sales of Pima totaling 3,400 RB were up noticeably from the previous week and up 27 percent from the prior 4-week average. Increases were for China (900 RB), India (500 RB), Pakistan (400 RB), Bangladesh (400 RB), and Turkey (400 RB).
For 2020/2021, total net sales of 100 RB were reported for China. Exports of 14,700 RB were up noticeably from the previous week and from the prior 4-week average. The destinations were primarily to China (8,300 RB), Pakistan (2,400 RB), India (1,300 RB), Bangladesh (900 RB), and Egypt (700 RB).
In other news, USDA will release new monthly supply/demand data at Noon EDT Thursday. Expectations call for slightly lower carryout for the U.S. and the world.
Friday, options for the July contract will expire. The 60-cent strike seems to be a popular level for spot market trade. The expiration effect will be seen in the open interest data on Monday.
For Thursday, support for July cotton is 58.25 cents, with resistance at 60.80 cents and 62.30 cents. Current estimated volume is 10,840 contracts.
