Cotton Rallying into Weekend


Old crop cotton futures are sitting off their session highs but still 2.3 to 2.8 cents in the black. That has March at a net weekly gain of 4.7 cents, with the lead month at levels not seen since August. New crop cotton is also extending higher at midday, though gains are limited to 30 points so far. 

NOAA’s 7-day QPF has another band of heavy precip for the South/East. From the Gulf of TX through TN/NC/KY accumulations top out near 4”. Most of Northern LA, North/Central MS, Northern AL, and Northern GA will get ~2”. Central TX cotton area will also get ¾ to 1 ½” of precip to build up soil moisture reserves. Yesterday’s Drought Monitor confirmed there was still some D3-D4 in Northeast MS, but the total D3-D4 area has fallen from 29% to 2% since December 5th for the South-Southeast.

The monthly WASDE update showed a 150k bale lighter domestic cotton use, now at 1.75 million bales. Exports, however, were raised by 200k bales to offset. On net ending stocks tightened by 100k to 2.8 million in the report. 

Cotton Ginnings data from NASS had the season’s total at 11.75 million running bales through Feb 1. That is still 15% behind last year’s pace, and the slowest ginning pace since 09/10. 

The Cotlook A Index shot up another 85 points for 2/8, now listed at 96.85 cents/lb. The AWP increased 2.4 cents to 70.04 cents/lb in the weekly FSA update. ICE certified stocks were only 999 bales as of 2/6.

Mar 24 Cotton  is at 91.76, up 266 points,

May 24 Cotton  is at 92.2, up 252 points,

Jul 24 Cotton  is at 92.21, up 229 points

On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.