DTN Closing Cotton            04/22 13:32

   Cotton Tries Mending Bearish Fences 

   In an attempt to unfold a technical turnaround, the cotton market ended its 
Monday session with triple-digit gains. 

Keith Brown
DTN Contributing Cotton Analyst

   In an attempt to unfold a technical turnaround, the cotton market ended its 
Monday session with triple-digit gains. Of course, during the month of April 
futures prices were essentially decimated as speculators overwhelmingly 
unloaded their long positions, so Monday's small increase was a welcome 
reprieve.  

   Monday afternoon at 4 p.m. EDT, USDA will report on the planting progress of 
the 2024 crop. Last week, the numbers showed that the crop was right at 8% 
planted.

   Spot May will enter its delivery on Wednesday, April 24. Coming into 
Monday's trade, the open interest for the May contract stood at 3,197 
contraction. It should be noted that ICE approved certificate stocks have been 
on the rise and are the highest since June 2021.

   Tuesday the U.S. Drought Monitor will be updated, but not released till 
Thursday morning. Currently, moisture conditions across the U.S. Cotton Belt 
have dramatically improved over last year. For context, currently some 9% of 
U.S. production area falls in the drought category compared to some 40% one 
year ago, and 55% two years ago. 

   The 6- to 10-day weather forecast shows temperatures will be above to 
much-above normal for the U.S. Cotton Belt. Rainfall is pegged to be normal to 
above-normal for Texas, and normal for much of the Delta and the Southeast.

   The U.S. dollar traded slightly higher today versus the euro and yen, but 
overall, it was a quiet trade. Last week's action was one of high volatility 
given the Israeli-Iranian military exchanges. Most traders returned to the long 
side of the Greenback upon hearing the Fed's reiteration of its 
higher-for-longer theme regarding U.S. interest rates. 

   Monday, May cotton settled at 80.04 cents, up 1.35 cents; July was 82.42 
plus 1.40; and December finished at 78.49, 94 points higher. Tuesday's 
estimated volume was 40,444 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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