Cotton Futures were higher yesterday in reaction to the USDA reports


General Comments: Futures were higher yesterday in reaction to the USDA reports. The domestic estimates featured slightly more production, but more demand as well to keep the ending stocks estimates unchanged. World data showed increased ending stocks estimates, but only due to the Chinese government stockpiling. Ending stocks estimates for the rest of the world were actually lower, and this provided a lot of the reason to buy futures. Ideas are that Cotton prices will now hold strong for a while due to the estimates released yesterday. Some traders think that US planted area will increase from the estimates released at the end of March due to more favorable Cotton futures prices and sinking Corn and Soybeans futures prices. Weather will be watched as more wet weather in the Delta and Southeast could create less interest in Corn and more in Cotton to avoid having Corn pollinate in the hottest time of the year. Demand ideas remain strong overall based on the strong export paces seen in the USDA reports in recent weeks and on reports of tight domestic and world cash markets, but export demand is a little less lately.

Overnight News: The Delta and Southeast will see mostly dry weather except for rain today. Temperatures will trend to below normal this week and will turn warmer this weekend. Texas will get dry weather. Temperatures will average near to below normal this week but will warm up again this weekend. The USDA spot price is now 80.91 ct/lb. ICE said that certified Cotton stocks are now 0.441 million bales, from 0.431 million yesterday. USDA said that net Upland Cotton export sales were 147,100 bales this year and 17,300 bales next year. Net Pima sales were 5,600 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are mixed to down with objectives of 82.00, 78.85, and 74.95 May. Support is at 84.40, 84.00, and 82.60 May, with resistance of 86.10, 86.50, and 87.10 May.