DTN Closing Cotton            05/08 13:34

   Cotton Snaps Higher Wednesday 

   The cotton market was sharply higher Wednesday as a combination of net-short 
speculators, a steep oversold condition, and bullish bargain hunters drove 
prices into triple-digit gains. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market was sharply higher Wednesday as a combination of net-short 
speculators, a steep oversold condition, and bullish bargain hunters drove 
prices into triple-digit gains. Despite the impressive rally, cotton's 
technical trend still remains down.

   Spot May cotton expired Wednesday at 80.06. For the life of the contract, 
its high/low range was 103.89 to 69.90. July cotton will now become the 
front-month contract and enter its delivery on June 24. 

   Thursday at 8:30 a.m., USDA will issue new weekly export sales numbers. Last 
week's net sales were off 45% for the week and down 20% from the monthly 
average, while weekly shipments were down 30% and off 39% on their four-week 
average.

   On Friday, USDA will present its May Crop Report. For that release, traders 
are expecting 2024/25 U.S. cotton production at 15.73 million bales, higher 
than the 12.10 million of the 2023/2024 season. Exports are expected to come in 
around 13.14 million versus 12.30 million in 2023/24. Ending stocks are 
expected at 3.49 million versus 2.50 million in 2023/24 and 4.25 million in 
2022/23. World production is expected to be around 116.74 million bales and 
consumption at 115.86 million. Ending stocks are expected to come in at 83.49 
million, which would be up from 83.08 in 2023/2024 and the highest since 
2019/2020.

   Crude oil was higher Wednesday, amid lower U.S. inventories. The EIA 
reported commercial crude stockpiles declined by 1.4 million barrels, which was 
surprising as a private industry poll indicated the potential for a 509,000 
barrel build.

   Wednesday, July was 80.06 cents, up 2.56 cents and December finished at 
77.70, 195 points higher, and March 2025 was 79.19, up 193 points. Wednesday's 
estimated volume was 60,467 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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