Cotton Ends Markedly Lower Wednesday
April 19, 2023
Cotton was demonstratively down Wednesday, rendering so much of its current bullish goodwill "asunder."
Cotton was demonstratively down Wednesday, rendering so much of its current bullish goodwill "asunder." The market has recently staged a fairly decent snap-up, posting its highest close Tuesday since March 7, but outside negative influences such as a declining energy complex, a weaker Dow and renewed fears of higher interest rates. Hopefully Thursday's weekly export sales can help right the ship.
Thursday morning, USDA will issue its weekly export-sales. Last week's sales were 143,000 bales, lower than the previous report, while shipments were 334,000 bales, a much-improved number.
Weather-wise, the immediate weather outlook still shows no rain for West Texas for the next five days. However, the extended six- to 100 and eight- to 14-day forecasts now show above-normal chances for precipitation for that region.
Crude oil prices fell about 2% to a two-week low Wednesday, despite a sharp decline in U.S. inventories. The EIA reported that crude inventories fell some 4.5 million barrels from last week, with traders expecting a decline of only 1.50 million barrels. Anyway, the greenback strengthened on fears that a looming Federal Reserve interest rate hike in May will slow the economy. Both the WTI and Brent brands have now erased all their price gains since the surprise oil output cut announced on April 2 by the OPEC+ group.
Wednesday, May 2023 finished at 83.24 cents, minus 1.31 cents, July settled at 83.65 cents, down 1.18 cents and December 2023 ended at 83.50 cents, 0.71 cent lower. Estimated volume was 42,415 contracts.