Cotton Sharply Up Thursday on Exports, Squaring
April 27, 2023
The cotton market was demonstratively higher Thursday amid a strong weekly export sales and end-of-the month squaring.
The cotton market was demonstratively higher Thursday amid a strong weekly export sales and end-of-the month squaring. Both sales and shipments towered over expectations, thus data caused a friendly reaction to a market, which had already entered oversold status. Additionally, there was a bit of end-of-the-month buying from speculators and funds.
Traders are expecting a wetter forecast for West Texas. Although that region essentially remains in drought conditions, the six- to 10- and the eight- to 14-day outlooks do indicate above-normal chances of rainfall.
Thursday's report on first Quarter data for the U.S. economy was disappointing. Traders were anticipating Q1 growth of 2%, but the actual release was 1.1%. The slowdown could encourage the Federal Reserve to mitigate its plan to hike interest rates.
Friday afternoon, the CFTC will issue its Commitment of Traders report, At last count, the managed-money funds were net short some 7,300 contracts. The cutoff time for gathering data is Tuesday's close.
There were zero deliveries on the May futures. That contract expires on Monday, May 8.
Heading into Friday's session, July cotton is up 0.25 cent for the week, but down 2.70 cents monthly, and 2.98 cents on the year.
Thursday, May 2023 finished at 78.63 cents, up 2.12 cents, July settled at 80.40 cents, up 2.04 cents and December 2023 ended at 80.62 cents, 1.46 cents higher. Estimated volume was 31,316 contracts.