Cotton Surges into the Weekend
Old crop cotton rallied triple digits to close out the week. March’s 268 point gain on the day left the contract a net 467 points higher for the week. Dec cotton closed 28 points in the black on Friday with a net weekly gain of 130 points.
The weekly Commitment of Traders report showed managed money cotton traders dropped 6k existing shorts and added 11.6k new longs during the week that ended 2/6. That raised their net long to 46,344 contracts. Commercial cotton hedgers added 17.5k short hedges for a 90,540 contract net short as of 2/6.
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.
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 closed at 91.78, up 268 points,
May 24 Cotton closed at 92.22, up 254 points,
Jul 24 Cotton closed at 92.22, up 230 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.