Cotton Eases Sideways to Lower
May 10, 2023
Cotton somewhat treaded water Wednesday after its massive bearish hit of Tuesday.
Cotton somewhat treaded water Wednesday after its massive bearish hit of Tuesday. In its decline, the market had become slightly oversold, and some traders wanted to square up before Thursday's weekly export sales. In addition, Wednesday's CPI number was taken as a positive by most investors.
The Labor Department issued a slightly improved year-over-year CPI number. Expectations had called for a 5% pace, but the April number was 4.9%. Initially that data rallied many markets, but the bullish effect quickly fell away.
Weather-wise, West Texas has immediate rain in its one- to five-day forecast for West Texas. In addition, the six- to 10- and the eight- to 14-day outlooks also hold above-normal chances.
Thursday, USDA will issue its weekly export-sales data. The prior two weeks revealed decent demand, which undergirded prices, but the overall tone of rising interest rates and a slow global economic recovery is aggravating prices.
On Friday, USDA will issue its May WASDE. Traders expect to see U.S. production at 15.78 million bales versus last year's 14.68-million-bale effort. 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 near 90.34 million bales, versus April's number of 92.01 million bales.
Thursday, July settled at 80.76 cents, down 0.23 cent and December ended at 80.76 cents, 0.25 cent lower. Estimated volume was 26,056 contracts.