DTN Morning Cotton Commentary          08/13 08:49

   Cotton Offers Small Rebound

   The cotton market is trading slightly higher, but still suffers from the 
hangover of Wednesday's unexpected bearish crop report.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is trading slightly higher, but still suffers from the 
hangover of Wednesday's unexpected bearish crop report. Essentially, traders 
were looking for a reduction in the 2020 crop to 17.02 million bales, but USDA 
increased the crop back up to 18.08 million bales. The question among traders 
and hedgers is how can fewer acres, with adverse weather, be able to show 
increased yields?

   Thursday morning USDA also issued its weekly export sales data. It included 
a lot of numbers as the agency mathematically blended the old crop "shavings" 
into the new crop trade. The details are present below as USDA published them. 
Net sales for 2020/2021, which began August 1, totaled 6,900 RB.  Increases 
reported for Pakistan (10,100 RB, including decreases of 300 RB), Indonesia 
(7,500 RB, including 6,600 RB switched from the Philippines, 100 RB switched 
from Japan, and decreases of 100 RB), Vietnam (6,200 RB, including 1,300 RB 
switched from South Korea), Turkey (5,900 RB), and Japan (3,400 RB), were 
offset by reductions primarily for China (21,500 RB), the Philippines (6,600 
RB), and El Salvador (1,200 RB).  A total of 2,883,200 RB in sales were carried 
over from the 2019/2020 marketing year, which ended July 31.  Exports for the 
period ending July 31 of 43,600 RB brought accumulated exports to 14,174,500 
RB, up 8 percent from the prior years' total of 13,158,900 RB.  The 
destinations were primarily China (19,500 RB), Vietnam (13,800 RB), Bangladesh 
(2,300 RB), Peru (1,400 RB), and Thailand (1,300 RB).  Exports for August 1 -- 
6 totaled 278,600 RB, with China (157,100 RB), Vietnam (56,300 RB), Turkey 
(13,700 RB), Pakistan (11,700 RB), and Bangladesh (9,600 RB) being the primary 
destinations.  Net sales of Pima for 2020/2021totaled 10,400 RB.  Increases 
were primarily for China (6,200 RB), Bangladesh (1,700 RB), India (900 RB), 
Vietnam (900 RB), and Pakistan (600 RB).  A total of 116,400 RB in sales were 
carried over from the 2019/2020 marketing year, which ended July 31.  Exports 
for the period ending July 31 of 3,700 RB brought accumulated exports to 
486,600 RB, down 25 percent from the prior years' total of 644,800 RB.  The 
destinations were primarily Pakistan (1,400 RB), Vietnam (900 RB), India (700 
RB), China (400 RB), and Greece (200 RB).  Exports for August 1 -- 6 totaled 
5,600 RB, with China (2,500 RB), Peru (1,200 RB), Vietnam (900 RB), Pakistan 
(900 RB) and Turkey (200 RB) being the primary destinations.     

   Sometime tomorrow, or into the weekend, the U.S. and China are expected to 
review the Phase One trade deal. Given the strained relations between the two 
nations, there may be some serious jawboning, but China's actions will be the 
thing to watch. Thus far, there has been a ton of public fussing, while 
conducting a ton of private buying.

   For Thursday, support for December lies at 62.00 cents and 60.00 cents, with 
resistance at 64.00 cents and 65.05 cents. The current estimated volume is 
5,367 contracts.

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




(c) Copyright 2020 DTN, LLC. All rights reserved.