By admin       2018-10-05

December cotton is under the $.7600 mark Thursday morning, as worsening sales are potentially threatening its old low of $.7537. However, we will let USDA’s own wording tell the story: Net sales of 21,800 RB for 2018-19 — a marketing-year low — were down 69% from the previous week and 74% from the prior four-week average. Increases were reported for Bangladesh (26,400 RB), Vietnam (20,500 RB, including 8,800 RB switched from China and decreases of 200 RB), Pakistan (15,700 RB), Peru (12,000 RB), and Indonesia (8,800 RB, including decreases of 400 RB). Reductions were reported for China (85,900 RB) and Brazil (200 RB). For 2019-20, net sales of 91,100 RB reported for China (90,200 RB) and El Salvador (2,100 RB), were partially offset by reductions for India (1,200 RB). Exports of 179,700 RB were up 29 percent from the previous week and 20% from the prior four-week average. Exports were primarily to Mexico (52,500 RB), Vietnam (35,100 RB), Pakistan (12,400 RB), China (12,400 RB), and Bangladesh (11,500 RB). Net sales of Pima totaling 3,200 RB for 2018-19 were down 56% from the previous week and 52% from the prior four-week average. Increases reported for China (4,400 RB), India (1,000 RB), and Turkey (100 RB), were partially offset by reductions for Vietnam (2,200 RB). Exports of 4,700 RB were down 1% from the previous week and 30% from the prior four-week average. The primary destinations were India (3,600 RB), China (500 RB), Japan (300 RB), and Peru (200 RB). We continue to monitor the tropical formation developing in the lower Caribbean. Current European weather models have it turning into a hurricane with a possible landfall in the Southeastern U.S. Of course, with harvest gathering at full steam, obviously now is not the time for a storm of any caliber to befall the Alabama/Georgia crop. Friday, the Labor Department will issue its monthly jobs report for September. Already this week a private payroll company indicated Friday’s number will be strong. If so, expect the Federal Reserve to continue their policy of increasing interest rates. Such action ought to strength the U.S. dollar, potentially crimping U.S. agricultural exports. Close-in support for December cotton is $.7537, and $.7500, with resistance at $.7865, and $.7965.

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