The cotton market is trading rather timidly Wednesday as traders want to see the details from the Federal Reserve’s two-day meeting. Its announcement is slated for 2 p.m. EST. Besides cotton, many markets are anticipating that the Fed will speed up the wind-down of its bond buying program. Such action would free the central bank to initiate raising interest rates over the next two years.
Tuesday China’s National Bureau of Statistics indicated the nation’s 2021 cotton output fell to 5.73 million tonnes, which was down 3% year-over-year. Additional information suggests plantings fell 4.4% to 3.03 million hectares, but yields slightly improved. USDA just reported China’s 2021/22 production at 26.75 million bales, or a 9% downward revision for last season.
Thursday at 8:30 a.m. EST, USDA will issue its weekly export sales data. Last week saw higher sales and shipments, although shipments are lagging due to the supply-chain crisis. Were it not for that global hindrance, it has been suggested exports would already be at 16.00 plus million bales.
Wednesday at 10:30 a.m. EST, the DOE will release its weekly inventories reports for crude, gasoline, and heating oil. Retail sales were already reported and were a dismal 0.3% versus expectations of 0.9%. Last year sales were 1.9%.
For Wednesday, close-in support for March cotton is 105.00 cents and 104.25 cents, while resistance stands at 107.80 cents and 108.40 cents. The estimated morning volume is 3,273 contracts.
