Cotton Still Wounded From Tuesday
May 10 2023
The cotton market is slightly lower Wednesday morning after Tuesday's devastating fall.The market was pressured by poor economic news from China and the potential for good rains across portions of the Southwest.
From a major wire-service article, we note that early Chinese cotton planting efforts may lag due to unusual frigid weather delays.The story quoted a cotton entity suggesting production could fall as much as 1 million metric tons (mmt) in 2023, a possible decline of more than 15%. However, the article also points out that China's crop still has time to recover.
Domestic weather has rain in the 1- to 5-day forecast for West Texas. In fact, some analysts are saying that up to five inches could fall. Additionally, the 6- to 10- and the 8- to 14-day outlooks hold above-normal chances.
Thursday, USDA will issue its weekly export sales data.The prior two weeks have revealed decent demand.However, the overall tone of rising interest rates and a slow global economy is aggravating prices.
On Friday, USDA will issue its May WASDE. In that report, USDA will present its first look at the 2023/2024 season's production. On average, traders expect to see production at 15.78 million bales versus the 14.68 million bale effort of last year.Ending stocks are looking to be slightly elevated, nearing 4.18 million bales compared to last month's 4.1 million. world carryout is expected to be close to 90.34 million bales, versus April's number of 92.01 million bales.
Wednesday's close-in support for July cotton stands at 79.29 cents and 78.80 cents, with resistance at 83.20 cents and 84.40 cents. Wednesday morning's estimated volume is 5,352 contracts.