By Keith Brown, DTN Contributing Cotton Analyst
January 13, 2021
The cotton market retreated Wednesday as some traders elected to book profits. Tuesday saw the market spike higher when USDA bullishly revised its supply/demand data. In a nutshell, the government cut 2020 production, increased exports and reduced domestic ending stocks. Additionally, world carryout was lowered; thus, prices shot higher. However, heading into a long three-day weekend (Monday is MLK holiday) traders are quick to come loose.
Thursday, USDA will issue its weekly export sales report, and obviously traders are hoping for stronger numbers. Yet, the current marketing situation is still running ahead of the government’s original forecast. The U.S. government announced Wednesday it was halting imports of certain products from the Xinjiang region of China.
It’s the most decisive action yet to pressure the communist party over its campaign against ethnic minorities. Officials said customs and border protection will use its authority to block products suspected of being produced with forced labor to keep out cotton, tomatoes and related products from the Xinjiang region of northwest China.
The Trump administration order will put economic pressure not just on China but major global retailers who unwittingly or otherwise import goods produced by people under conditions that are akin to modern-day slavery.
This Week’s Calendar: Thursday:
Weekly Exports/Sales at 8:30 a.m.
Friday: Retail Sales at 8:30 a.m.
For Wednesday, March cotton closed at 80.92 cents, down 0.78 cent, July settled at 82.53 cents, down 0.62 cent and December at 76.80 cents, down 0.43 cent; estimated volume was 37,881 contracts. (Source: Agfax.com)