Overnight the cotton market continued to trade higher amid the news for India and the dry weather of Texas.
Wednesday, India announced the implementation of a duty-free import program to cool domestic prices and to help struggling mills. The tariff-free program will last until Sept. 30, 2022.
Weatherwise, the 1- to 5-day forecast has zero rain for West Texas. Moreover, the 6- to 10-day outlook indicates well below normal chances for precipitation. Much of West Texas is now in the “exceptional drought” condition which is the most severe reading from the National Climate Prediction Center.
USDA just released its weekly export sales report and the numbers were a tad bearish. Here is the text from the report:
“Net sales of 59,300 running bales (RB) for 2021/2022 — a marketing-year low — were down 6% from the previous week and 76% from the prior four-week average.
“Increases primarily for Turkey (27,100 RB), India (24,400 RB, including decreases of 16,100 RB), Indonesia (6,700 RB, including 200 RB switched from Japan), Vietnam (6,200 RB, including 900 RB switched from South Korea), and Peru (6,200 RB), were offset by reductions for China (24,800 RB) and South Korea (1,700 RB).
Net sales of 132,000 RB for 2022/2023 were primarily for Mexico (62,700 RB), Turkey (17,600 RB), Peru (13,200 RB), Guatemala (11,400 RB), and South Korea (7,900 RB). Exports of 333,800 RB were down 27% from the previous week and 14% from the prior four-week average. The destinations were primarily to China (122,700 RB), Pakistan (43,800 RB), Turkey (37,400 RB), Vietnam (32,700 RB), and Mexico (20,700 RB).
“Net sales of Pima totaling 2,100 RB were down 68% from the previous week and 71% from the prior four-week average. Increases were primarily for Pakistan (900 RB), Indonesia (900 RB), and Colombia (200 RB).
“Net sales of 4,100 RB for 2022/2023 were reported for India (4,000 RB) and Japan (100 RB). Exports of 18,100 RB were up 49% from the previous week and 92% from the prior four-week average. The destinations were primarily to India (5,500 RB), Peru (4,400 RB), China (3,600 RB), Honduras (1,700 RB), and Vietnam (700 RB).”
The market will be closed Friday in observance of Easter, thus there will be no DTN commentary tomorrow. Normal trading will resume on Sunday night.
For today, close-in support for May Cotton is 138.00 cents and 135.50 cents, while resistance stands at 146.50 cents and 147.00 cents. The estimated morning volume is 13,392 contracts.
