Cotton Market Down 55 to 60 Points

Cotton futures are 55 to 60 points lower coming out of the weekend break as the ags and energies are seeing broad selling, while gold and the stock market futures are higher. On Friday, cotton prices closed 33 to 42 points higher on the board. For October that extended the week’s gain to 133 points. USDA reported the weekly average spot price at 59.91 cents/lb, which was 235 points higher. In the WASDE reports, USDA left the 2019/20 cash average price at 59 cents/lb, but raised the 2020/21 by 2 cents to 59 c/lb. USDA’s cotton production forecast is 17.5m bales. That is down 2m bales from June on lower acres and lower yields. 2020/21 yield is estimated at 820 lbs/acre, down by 5 from the previous estimate. USDA cut new crop exports by 1m bales, but stocks were still down by 1.2 million from production losses. New crop ending stocks are estimated at 6.8 m bales. The CoT report showed net new buying alongside of short covering from cotton spec traders. Managed money’s net position in cotton was 21,520 contracts net long on July 7. Thursday cotton sales on the online cotton trading platform The Seam were a 6 month daily high 16,288 bales. WTD sales on The Seam were 24,053 bales at a wtd av price of 57.40 c/lb. The July 9 Cotlook A index was up by 70 points to 70.15 c/lb. The AWP for cotton for this week is 51.48 cents/lb., with a 0.52 cent LDP.

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