Cotton Gears Up For News

The cotton market is quietly awaiting certain events and news that should influence its prices. There is export sales, the CFTC data, and spot March’s delivery. Additionally, China’s Golden Week will end soon, perhaps allowing for increased Asian business.

China has been celebrating the Lunar New Year or Golden Week. Although the holiday extends to March 16, this week’s activities are the pinnacle. Next week, more business activity across Asia will likely return to normal.

Today and Friday, USDA will hold its annual Ag Forum. The presentation will offer certain economic insights and include with ten-year projections for U.S. agriculture.

Weekly export sales are delayed until Friday due to the observance of President’s Day. Last week saw combined seasonal sales nearing 285,000 bales, off some 8%, while shipments were 188,600, down 20%. The report will be out at 8:30 a.m. EST.

This Friday at 3:30 p.m. EST, the CFTC will update its Commitments of Traders data. Its last calculation showed managed-money funds had increased their net-short position to 75,602 contracts. Their record concentration from last October stands at 81,343 contracts. 

The delivery process for March cotton commences Monday. 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 27,850 contracts.

Chart support for July cotton stands at 65.05 cents and 64.85 cents, with resistance around 66.00 and 66.50 cents. Thursday morning’s estimated volume is 15,770 contracts.

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