Doane Cotton Close: Dec. Lower in Continued Sideways Action

    A rather poor close, but cotton futures continue seemingly trapped in a trading range between 62 and 66 cents for the December contract. NASS put out its weekly crop progress and crop condition report after markets closed yesterday and they showed 50% of the crop has now been harvested, down a point from the 5-year average and 8 pts further along than last year.

    The report showed bolls open on 95% of the crop, 2 pts below the 5-year average and the same as last year. As for condition of the yet unharvested half, 48% is still rated good to excellent, the same as last week and a bit better than last year’s 43%. 18% is rated poor to very poor, the same as last week but 5 pts lower than the percentage rated that poorly a year ago.

    Wet weather is going to remain a problem for many cotton producers trying to get the crop harvested without loss of quality here in the U.S. And now there’s a big cyclone brewing and headed for key cotton producing regions of India.

    Further, cotton market guru O.E. Cleveland reports that while claiming they will restrict cotton imports to what’s allowed under strict “quota”, Chinese clothing mills are again doing an effective end run around domestic mills by sharply rising imports of cotton yarn.

    Weekly export sales last Friday were very good; up even more than last week’s increase and 95% higher than the 4-week average. YTD, export sales are at 63% of USDA’s current forecast for the 2014/15 marketing year vs. a 5-year average of 56%. That translates into a sales “cushion” of about 700,000 bales more than what’s needed to warrant the current forecast for 10 million bales in 2014/15 exports and a reasonably good chance USDA will hike its forecast in the Nov. 10 WASDE (supply/demand) update.

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