The cotton market is feebly higher Wednesday as it watches the unfolding geopolitical developments with Ukraine/Russia, and is also awaiting Thursday’s USDA reports. Of late, cotton has been on a wild ride as it tries to balance its own supply-demand fundamentals versus the emotional swings caused by the Eastern European war.
Thursday, USDA will report on export sales as well as the 2022 planting intentions. Last week saw huge sales numbers, but more importantly, record shipments. Regarding intentions, the average trade expectation is 12.3 million acres.
If realized, that number would be down from several private and governmental surveys conducted during the winter, but higher from last year’s 11.2 million acres. Export sales will be out at 8:30 a.m. EDT, while intentions will be released at 12:00 p.m. EDT.
Crude Oil prices are somewhat higher overnight, influenced by a friendly API number and fears that Russia is not seriously seeking a negotiated settlement with Ukraine. Tuesday the API (American Petroleum Institute) reported crude stocks fell by 3 million barrels last week.
That was triple the forecasted decline by several major energy analysts. Meanwhile, the Russians are talking about peace, but continue to pound Ukrainian cities. It is expected even more and heavier economic sanctions will be forthcoming on Moscow.
For Wednesday, close-in support for May cotton is 135.90 cents and 134.00 cents, while resistance stands at 140.00 cents and 142.00 cents. The estimated morning volume is 7,404 contracts.
