By admin       2018-09-14

Overnight December cotton is trading lower with a supply-demand hangover. Yesterday, USDA increased the U.S. crop by some 560,000 bales, from 19.22 to 19.68 million bales, in its monthly supply-demand report for September. However, industry expectations were calling for reduced production. Although USDA did lower its yield-per-acre, it also increased total acres, as well as hiking domestic and world carryouts. The end result was a huge price spill, until news of a possible new meeting trade meeting with China surfaced, paring some of Wednesday’s losses. This morning USDA released dismal weekly sales and exports data. Net sales of 81,700 RB for 2018/2019 were down 11% from last week and 36% off the 4-week average. Increases were reported for Mexico (22,300), Indonesia (13,800), Vietnam (13,500), and Taiwan (10,500). For 2019/2020, net sales were 17,700 bales for Thailand (8,400), Mexico (7,100), and Indonesia (2,200). Exports of 135,700 bales were down 24% on the week and 27% from the prior 4-week average. Exports were reported primarily to Vietnam (33,300), Pakistan (17,400), Mexico (17,200), China (16,500), and Indonesia (15,400) Close-in support for December cotton is 8125 and 8060, with resistance at 8420 and 8530.

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