DTN Closing Cotton            08/12 13:38

   WASDE, Production Reports Disappoint Cotton Market

   The cotton market fell from its 85.25 cent high on Wednesday amid lackluster 
supply-demand numbers.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market fell from its 85.25 cent high on Wednesday amid lackluster 
supply-demand numbers. Traders will look at Thursday's export sales and 
Friday's CFTC update for further price insights.

   USDA lowered its forecast for U.S. production and ending stocks from its 
July estimates, but not as much as expected. A decline in yield was almost 
offset by increases in planted and harvested area. World ending stocks were 
lower than expected. The report placed U.S. 2026/27 cotton production at 13.61 
million bales versus an average trade expectation 13.54 million bales versus 
the 13.70 million bales in the July update. Average yield came down to 798 
pounds per acre versus 872 in July, but planted area was raised 6% from last 
month and harvested area by 8%. Exports came in at 12.30 million bales versus 
12.30 million bales expected (range 12.10-12.70 million) and 12.30 million 
bales in July. Ending stocks were 4.00 million bales versus 3.86 million bales 
expected (range 3.10-4.30 million) and 4.10 million bales in July. The 
stocks/use ratio is now at 28.8% versus 29.5% in July, 30.5% last year and a 
five-year average of 27.1%.

   Thursday at 8:30 a.m. EDT, USDA will issue its weekly export sales report. 
Last week saw net sales for the 2026/2027 season of 352,400 bales. The top 
buyers included Vietnam (245,500), India (42,200) and Pakistan (18,400). 
Shipments tallied 233,800 bales, which was down 15% weekly. The primary 
destinations were Vietnam (78,600), Pakistan (49,400), Indonesia (18,000), 
Turkey (12,700) and Mexico (12,400). The data will be out at 8:30 a.m. EDT.

   Also on Friday, the CFTC will update its Commitment of Traders numbers. Last 
week saw the managed-money funds net buy 9,800 positions, swelling their 
net-long carry to 62,279 contracts.

   Crude oil was relatively quiet Wednesday even after Iran-backed Houthi 
rebels killed six people in an attack on a cargo ship in the Red Sea. Then, the 
U.S. Navy fired on a container ship that allegedly tried to break the blockade 
of Iranian ports in the Gulf of Oman. The incidents underscore the growing 
impact of the nearly six-month-old war on two key global shipping routes.

   For Wednesday, December closed at 84.38 cents, down 1 point; March 2027 
finished at 86.32 cents, plus 8 points; and July 2027 settled at 87.04 cents, 
30 points higher. Wednesday's estimated volume was 55,195 contracts.

   Keith Brown can be reached at [email protected]




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