Cotton rises on strong export sales


General Comments: Futures closed higher in response to a week of very strong export sales reported by USDA. The news negated reports that China could begin to sell Cotton from state reserves this week. Ideas are that the sales there would kill demand for imported Cotton, especially from the US, but industry there and in other parts of the world seem to be loading up, anyway. Scattered showers are in the forecast for the week in Eastern areas, but the crop should remain in good condition as the rains are not expected to be big. It will turn cooler but not as cold as last week. Brazil conditions are reported to be very good in Bahia. US crop conditions right now are generally good in Texas amid dry weather. The Delta and Southeast are reporting generally favorable conditions as well.

Overnight News: The Delta and Southeast will see dry weather early this week and light precipitation late this week. Temperatures will average near to above normal. Texas will see dry conditions through Wednesday and precipitation on Thursday and Friday. Temperatures will trend to near to above normal. The USDA spot price is 74.46 ct/lb. today. ICE said that certified Cotton stocks are now 0.202 million bales, from 0.193 million yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 76.30, 75.20, and 74.20 December, with resistance of 77.70, 78.50, and 78.80 December.


General Comments: Futures closed higher on speculative buying tied to the losses USDA showed in its production reports last week and on cold weather that was forecast in the Eastern part of the US. The freeze season is not all that far away and there is usually some speculative buying that appears at this time and as soon as the cold air starts to filter in from Canada. Traders are now expecting USDA to lower production even more in coming production reports. The greening disease has affected crops in a bigger way than many in the trade expected. Demand remains weak and there have been no tropical systems to hit the state. Growing and harvest conditions in the state of Florida remain mostly good. Brazil is seeing near to above normal temperatures and dry conditions or a few showers.

Overnight News: Florida weather forecasts call for a few showers this week. Temperatures will average near to above normal.  

Chart Trends: Trends in FCOJ are up with objectives of 143.00 January. Support is at 131.00, 130.00, and 126.00 January, with resistance at 138.50, 140.00, and 143.00 January.

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