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DTN Closing Cotton 05/16 13:35
Cotton Stays Up
The cotton market fought off a bearish reaction to poor export sales
Thursday morning to close higher.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market fought off a bearish reaction to poor export sales
Thursday morning to close higher. Other factors possibly supporting the market
were its oversold condition, plus possible damage to the Brazilian cotton crop.
USDA reported weaker sales and shipments in its latest update. Last week saw
combined seasonal sales in excess of 450,000 bales, versus Thursday's sales of
296,000. The market's earlier reaction was to trade lower, with old crop July
going negative.
We note there are circulating stories among some newswires indicating that
the Brazilian cotton crop was damaged in those recent heavy rains. In a period
of ten days, southern Brazil saw rain amounts ranging between 10 to 25 inches.
Moreover, it has been too wet to get any real sense of loss.
Additionally, NOAA updated U.S. Drought Monitor showed a reading of 6% net
drought versus the last reading of 8%. Last year, at this time, that condition
was 45% net drought.
The U.S. dollar was higher Thursday, amid stronger U.S. imports. Prices for
imports increased 0.9% last month, a jump that could raise the notion that the
Federal Reserve could delay any move to interest rates. Additionally, the
number of Americans filing new claims for unemployment benefits jumped.
Thursday, July was 76.24 cents, up 0.83, and December finished at 75.19
cents, 0.90 cent higher, and March 2025 was 76.80 cents, up 0.95 cent.
Thursday's estimated volume was 38,587 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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