Cotton falls as export demand found wanting

COTTON (NYBOT:CTH14)

General Comments: Futures closed lower after USDA showed higher U.S. production and export demand to leave U.S. ending stocks estimates unchanged. The trade had expected less ending stocks in the estimate. USDA also increased world production and ending stocks, mostly on increased production in China. The data will reinforce the demand fears that the market has, anyway. China is the number one buyer of U.S. cotton, so the data can only hurt demand ideas. Export sales have been less, and there have been some private sources releasing analysis that shows next to no imports of cotton by China in the coming year as it reorganizes its support programs and tries to move massive government stocks. The U.S. economy is improving slowly and should support increases in demand over time as people start to buy clothes again. Brazil conditions are reported to be very good in Bahia.

Overnight News: The Delta and Southeast will see precipitation tonight and tomorrow, then dry conditions. Temperatures will average near to below normal. Texas will see dry conditions. Temperatures will average above normal. The USDA spot price is 79.17 ct/lb. today. ICE said that certified Cotton stocks are now 0.043 million bales, from 0.042 million yesterday.

Chart Trends: Trends in Cotton are mixed to down with objectives of 8580 March. Support is at 81.50, 80.80, and 79.80 March, with resistance of 83.50, 84.10, and 84.60 March.

FCOJ (NYBOT:OJH14)

General Comments: Futures closed higher in reaction to the lower than expected Florida production estimates provided by USDA. Production for Florida was estimated at just 115 million boxes as the greening disease continues to hurt production in a big way. The greening disease could cause reduced production for the next few years. Growing and harvest conditions in the state of Florida remain mostly good. Irrigation water is available and is being used. Harvest is very active, but fruit sizes are reported to be small. Brazil is seeing near to above normal temperatures and scattered showers late in the week.

Overnight News: Florida weather forecasts call for mostly dry conditions except for a few showers tomorrow. Temperatures will average above normal through Wednesday, then near to below normal.

Chart Trends: Trends in FCOJ are up with no objectives. Support is at 147.00, 144.00, and 143.00 March, with resistance at 152.00, 155.00, and 158.00 March.

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