The cotton market finished lower Thursday based somewhat on poor export-sales data, but also in sympathy with cascading grains markets. Thursday’s combined weekly seasonal sales total was 281,000 bales, compared to last week’s joint sales of some 647,000 bales.
In addition, Thursday’s CPI data showed a higher inflation rate not seen since 1982, and it absolutely opened the door for higher interest rates. Lastly, the market is potentially operating under the influence of a bearish reversal session from Feb. 4.
Friday, the CFTC will update the status of the managed-money funds. At last count they had increased their net long positions above 80,000 contracts. Obviously, they have been the main driver of bullish prices.
Options on the March contract will expire Friday. As of Thursday, any call below the 1.25-cent mark will be exercised long into the trade. Soon to follow will be delivery against the March contract. That event commences on Tuesday, Feb. 22. That means most participants must either “fix” or “roll” their outstanding spot positions by Friday’s close on the 18th, due to the observance of President’s Day, Monday Feb. 21.
Thursday, March cotton settled at 125.66 cents, down 0.77 cent, July ended at 120.51 cents, down 0.65 cent and December finished at 105.27 cents, 0.34 cent lower; estimated volume was 58,225 contracts.