Price action: May cotton rose 46 points to 84.17 cents but fell 73 points on the week.
5-day outlook: Cotton futures ended the week mostly sideways after making brief attempts above 86.00 cents early in the week. USDA reported weaker export sales early Thursday for week ended Feb. 23, which weighed on prices. Net sales of 170,600 RB were reported for the week, which was down 60% from the previous week, and 37% from the four-week average. China (81,600 RB) was the lead buyer for the week, along with Vietnam (78,600 RB, including 900 RB switched from China and 100 RB switched from Japan) and India (18,400 RB). Traders will continue to maintain a close eye on exports as well as the direction of the U.S. dollar index and crude oil futures.
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30-day outlook: USDA’s March 31 Prospective Plantings report will provide a deeper look into U.S. acres which are currently projected at 10.9, million, suggesting over a 20% decrease in acres from 2022. The end-of-the-month report will provide the first survey-based look at 2023 planted acreage, which could lend a market surprise considering a wide range of analyst acreage estimates. Planting weather will also be of importance over the next month. World Weather Inc. notes South Texas and the Texas Coastal Bend production areas all need moisture for dryland planting this spring, but not much is expected for a while. The forecaster further states West Texas is still quite dry and will have to get significant moisture this spring to ensure the best planting and production potential.
90-day outlook: The global economy will continue to be a focus as the summer months inch closer. A rising U.S. dollar could hinder exports, while a possible recession could simultaneously curb domestic demand. Traders will continue to closely monitor global and U.S. economic data which will offer insight into the state of the overall economy and the Fed’s fight against inflation. U.S. weather and crop conditions will further serve as a market driver.
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