DTN Closing Cotton            08/12 13:45

   Cotton Sharply Down on USDA Data

   The cotton market was sent reeling lower Wednesday as USDA issued a 
surprisingly bearish crop report.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market was sent reeling lower Wednesday as USDA issued a 
surprisingly bearish crop report. Going into the report, the average Industry 
estimate was 17.20 million bales, down 300,000 from the July numbers. However, 
government tabulators actually pegged the crop at 18.08 million bales. 
Additionally, U.S. carry was increased to 7.60 million bales, up from July's 
carryout of 6.80 million. World carry also jumped. Due to COVID shutterings of 
retail businesses and textile mills, global stocks went from 102.77 million 
last month to Wednesday's 104.91 million bales.

   Thursday, USDA will release its weekly export sales data, and the hopes of 
traders are to see more Chinese buying. Of course, a bigger concern will be 
whether unshipped cotton from 2019-20 does indeed get rolled into the 2020-21 
season.

   Lastly, the market is growing anxious about the U.S.-China review of the 
phase-one trade deal. Thus far, both sides have been essentially saying the 
right things, but make no mistake, the general relationship between the two top 
economies is souring.

   December cotton ended at 62.20 cents, down 1.29 cents, March closed at 63.14 
cents, down 1.19 cents and December 2021 finished at 63.28 cents, down 0.54 
cent. Estimated volume was 30,465 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com or by calling 
(229) 890-7780.




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