The cotton market was sharply higher Thursday amid a rising tide of outside commodities markets. Energies, grains, metals and others posted magnificent turnaround gains Thursday after being collectively pummeled Wednesday. Thus, cotton traded higher in sympathy.
Yet, the cotton market also saw very supportive export-sales data Thursday morning from USDA. To that end, weekly shipments stayed above the psychologically supportive levels of 300,000 plus bales.
There are growing concerns over the drought conditions embedded in West Texas. Currently, the six- to 10-day and the 8- to 14-day forecasts are signaling below-normal precipitation for that area. However, a bigger issue may be the threat to global foods with a war and inflation. Thus, the cotton market may need to build a weather premium to attract 2022 acres.
From Thursday’s weekly export-sales data, we note that current season sales reached 96% of the USDA’s marketing-year forecast. The five-year average stands at 91% for this time of year. China has been the top buyer of U.S. cotton, but the COVID closures of Shanghai and Shenzhen are kindling some demand concerns.
Thursday, May cotton settled at 121.86 cents, up 2.06 cents, July closed at 118.10 cents, up 2.10 cents and December finished at 103.52 cents, 0.89 cent higher; estimated volume was 24,770 contracts,
