Outside markets are somewhat undermining the cotton market. Wednesday’s announcement of future interest rate hikes from the Federal Reserve, as well as the Ukraine situation continues, to unnerve traders across most trading pits. The dollar surged higher, while gold and the Dow sharply corrected.
Thursday morning USDA issued its weekly export sales and the data should be seen as friendly. The numbers are as follows: Net sales of 391,300 RB for 2021/2022 were up 43 percent from the previous week and 55 percent from the prior 4-week average.
Increases primarily for Vietnam (132,900 RB, including 600 RB switched from South Korea and 400 RB switched from Japan), India (62,400 RB, including decreases of 3,500 RB), China (58,200 RB, including 8,400 RB switched from unknown destinations and decreases of 2,200 RB), Bangladesh (39,400 RB), and Pakistan (37,300 RB), were offset by reductions for unknown destinations (8,400 RB).
Net sales of 106,800 RB for 2022/2023 were primarily for Indonesia (33,900 RB), Pakistan (22,900 RB), Guatemala (14,000 RB), Turkey (13,600 RB), and Honduras (9,700 RB). Exports of 197,900 RB were unchanged from the previous week, but up 25 percent from the prior 4-week average. The destinations were primarily to China (64,200 RB), Turkey (23,800 RB), Vietnam (23,300 RB), Pakistan (20,300 RB), and Mexico (15,700 RB).
Net sales of Pima totaling 3,600 RB were down 5 percent from the previous week and 19 percent from the prior 4-week average. Increases were reported for India (1,700 RB), Vietnam (800 RB), China (800 RB), Japan (200 RB), and Mexico (100 RB).
Exports of 4,300 RB were down 43 percent from the previous week and 44 percent from the prior 4-week average. The destinations were primarily to India (1,700 RB), Peru (1,300 RB), China (700 RB), and Egypt (400 RB).
Friday the CFTC will update its commitment-of-traders data. Last count showed the managed-money funds were roughly 77,000 contracts net long. However, since that time, the market has taken a more defensive trading posture, so some traders may have moved to the sidelines. The report is out at 3:30 p.m. EST.
For Thursday, close-in support for March cotton is 120.70 cents and 120.05 cents, while resistance stands at 122.70 cents and 123.15 cents. The estimated morning volume is 7,744 contracts.