Cotton Awaits Delivery

The cotton market is somewhat lower Tuesday morning as traders adjust their positions for March delivery. Moreover, with gold and silver sharply lower, there is an aura of negativity in the air with the surrounding markets. Besides the concerns for delivery, there is the CFTC data and export sales to assess. Additionally, the geopolitical concerns of Ukraine, Russia, and Iran have yet to fade.

Last Friday, the CFTC updated its Commitments of Traders information. The most current calculation shows managed-money funds net sold some 3,800 positions list week, increasing their net-short carry to 75,602. Their

The delivery process for March cotton starts Monday, Feb. 23. Any producer tied to the March contract must either flatten or roll by this Friday, Feb. 20, to avoid the delivery process. Current open interest for spot March is 41,054 contracts.

This week, China will celebrate the Lunar New Year holidays. That means much of the nation’s business activities may be slowed or shuttered altogether. Typically, a large part of the Chinese population will travel to their ancestral homes for family gatherings and celebrations.   

With the observance of President’s Day Monday, many applicable reports will be delayed by one day. Thus, weekly export sales will be reported this Friday at 8:30 a.m. EST. 

Chart support for July cotton stands at 65.30 cents and 64.45 cents, with resistance around 66.20 and 66.45. This morning’s estimated volume is 15,260 contracts.

Keith Brown can be reached at commodityconsults@gmail.com or by calling (229) 890-7780.