Cotton Follows Metals Higher

The cotton market is higher Monday as it is watching the sensational rally in the metals. Traders will be assessing the situation in Venezuela as it relates to how additional oil could impact input costs, fuels, synthetics, and the U.S. dollar. However, traders are also seeing a change in ownership of the 2025 crop, as growers are selling while the merchants are buying.

Last week, USDA released details regarding payments from the Farmer Bridge Assistance program. The highest per-acre payments will be paid to rice farmers, who could receive $132.89 an acre, followed by cotton farmers, who would receive $117.35.

The CFTC’s most recent Commitments of Traders Report showed managed money traders were net buyers of 4,387 contracts of cotton for the week ended Dec. 23, reducing their net-short to 50,446. This is the smallest net-short these traders have held since last July. On Oct. 21 they reached a record net-short of 81,245 contracts.

USDA will issue its next export sales report Monday at 8:30 a.m. EST. The last export sales report for the week ended Dec. 18, showed sales of 182,680 bales. The previous release had sales of nearly 320,000 bales. Cumulative sales stand at 57% of the USDA forecast versus a five-year average of 73% for this point in the marketing year. The largest buyer last week was Vietnam (89,673 bales), followed by Pakistan (29,514). Shipments totaled 146,915 bales, up from 134,371 the previous week, and the highest since October 23rd.

Daily chart support for March cotton stands at 63.70 cents and 63.00 cents, with resistance hovering about 65.00 cents and 65.50 cents. Monday morning’s estimated opening volume is 17,785 contracts.

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