Cotton Resumes Run Higher

After taking a brief retreat Tuesday, the cotton market is right back trying to move higher. Most technical indicators have turned “friendly”, causing the once heavily bearish speculative funds to cover their negative positions. In fact, Friday’s CFTC data will show a new insight as to their stance. 

Thursday at 8:30 a.m. EDT, traders will see a new round of export sales from USDA. Last week’s data showed net weekly sales were 319,000 bales, down 14%, while shipments were 342,000 bales, off 4%.

First notice day for the May contract is April 24. Its delivery period runs through May 6.

Also on Thursday and this Friday, traders will see fresh retail sales data and updated housing starts numbers. Both of those reports reflect a large portion of domestic demand for the cotton industry.

On Friday, the CFTC will update its weekly Commitments of Traders information. Last week, the managed-money funds were pegged net-short by a proverbial hair, a mere 2,020 contracts. The update will be released at 3:30 p.m. EDT.

The American Farm Bureau has released a survey indicating some 70% of U.S. growers do not have the funds to cover their general fertilizer needs. The disposition is different from section to section of the country, but for the Southeast only 19% of producers report they have pre-booked their nutrient needs for 2026. In addition, farm diesel prices have increased some 45% since the end of February, thus raising the costs of fieldwork, irrigation, and other farm transportation needs.

Chart support for July cotton stands at 75.90 cents and 75.10 cents, with resistance around 77.25 cents and 78.00 cents. Wednesday morning’s estimated volume is 26,715 contracts.

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