Overnight, the cotton market is running strong with new crop months posting new highs. Behind the move is a continuing bleak weather scenario for West Texas and surrounding states, as well as China’s relaxing some COVID-19 restrictions on Shanghai. Additionally, the intensity of the Ukraine/Russia war has most commodities surging higher.
Weather-wise, the immediate forecast (1 to 5-day) forecast has zero rain for West Texas. In fact, the 6 to 10-day forecast indicates well below normal chances for precipitation. The 8 to 14-day outlook is less grim as it indicates some possible rain for Kansas and Oklahoma, but Texas looks to remain dry.
USDA issued its weekly crop progress report Monday which showed 7% of the U.S. cotton crop had been planted as of April 10, up from last week’s pace of 4% seeded. A year ago the crop was 8% done. Texas was 12% complete, up from 6% a week ago.
May Cotton will enter its delivery on Monday, April 25. That means all participants wanting to avoid the perils of delivery must vacate their spot positions by the preceding Friday.
For Tuesday, close-in support for May cotton is 135.30 cents and 134.75 cents, while resistance stands at 140.00 cents and 141.10 cents. The estimated morning volume is 12,243 contracts.