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DTN Cotton Close

Cotton Lower on Technicals, Weather

Jun 26, 2023

The cotton market was lower Monday as its technical trend is turning bearish.

The cotton market was lower Monday as its technical trend is turning bearish. To that end, Monday's December settlement was the lowest of 2023. In addition, there were some beneficial rains seen across the U.S. delta and the Southeast as well in recent days.

Monday afternoon, USDA will issue its weekly Crop Progress report. Last week's numbers showed that 47% of the 2023 crop was in good to excellent condition versus 40% a year ago and 48% on average. Texas was 30% G/E versus 20% a year ago and 35% on average.

This Friday, USDA will publish its long-awaited acres for 2023. The current average trade guess stands at 11.12 million acres. The range of expectations runs from 10.5 to 12.0 million acres. The forecast in March was 11.256 million, and last year's plantings totaled 13.763 million. 

Weather-wise, West Texas is suffering from an intense heatwave. In fact, many locales will see triple-digit temperatures. The seven-day outlook indicates virtually no rain. No doubt there will be a noticeable loss of soil moisture.

Spot July remains in its notice period. Monday there were 167 deliveries placed against the contract. July cotton expires July 7.

The U.S. Dollar Index was slightly lower Monday. Over the weekend, there was an influx of safe haven buying amid the military mutiny, which unfolded in Russia. Additionally, traders see a slowing global economy, as the world's central banks tighten interest rates.

Monday, July cotton settled at 77.07 cents, down 0.99 cent and December ended at 77.86 cents, down 0.81 cent and March was 78.05 cents, 0.83 cent lower. Monday's estimated volume was 25,523 contracts.

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