Traders are prepping for the weekend mainly by short-covering. For much of this week, the cotton market has seen quite benign trade. However, a stronger Dow Jones and the continuation of the Ukrainian/Russian talks is offering some slight hope. In addition, China has announced a new import quota of some 400,000 tonnes of foreign fiber.
From Thursday’s weekly exports-sales report we note that cumulative cotton sales for 2021/22 have reached 13.28 million bales, down from 13.79 million from a year ago. The five-year average is 12.939 million. Sales have reached 96% of the USDA’s forecast for the marketing year versus a five-year average of 91%
NOAA reported there is a 53% chance of La Nina conditions during June-August 2022 continuing during the Northern Hemisphere. The precipitation outlook for the next three months looks consistent with a La Nia pattern. Dry weather is expected to dominate the southern half of the country, from Texas to Georgia. However, more rain is expected in the Pacific Northwest and the Ohio River Valley.
For Friday, close-in support for May cotton is 116.70 cents and 115.40 cents, while resistance stands at 119.20 cents and 120.10 cents. The estimated morning volume is 5,797 contracts.
