It was a strong week for U.S. futures and for world prices in general last week. U.S. futures recovered from the lows set the week before in response to the gloomy demand estimates released by USDA in its monthly supply and demand reports.
It cut Chinese demand in a big way and increased ending stocks. The export sales report gave the markets a good reason to bounce as the sales were really very good at over 300,000 bales. Southeast Asia was once again a major buyer and continues to support the market. Prices in South Asia, and especially India and Pakistan continue to work higher due to lost production.
The monsoon was uneven and created some losses, plus both countries have battle the white fly pest that eats the crop. The Indian state buying agency has stopped buying as prices are now considered strong enough and higher prices are expected. Pakistan has been buying a lot of Indian cotton this year due to the losses in its own production. Southeast Asian buyers do not seem to fear the loss of Chinese business and keep buying.
That is good news for the United States and also for India and Brazil. The lost Chinese business remains the main feature of the market, but the price action last week showed that there is enough other business around to support values within the trading range that has been in place for the last year and a half. That implies that Southeast Asia will remain a strong buyer for the next several months if not longer.
Overnight News: The Delta and the Southeast should see dry weather, but a few showers are possible tomorrow. Temperatures should average above normal today, then trend to below normal. Texas will see dry weather today, then showers tomorrow, then dry weather. Temperatures will average above normal today, and then near to below normal. The USDA spot price is 58.14 ct/lb. today. ICE said that certified Cotton stocks are now 61,538 bales, from 60,463 bales yesterday. China imported 95,581 tons of Cotton in January down 41% from last year,
Chart Trends: Trends in Cotton are mixed. Support is at 5940, 5900, and 5830 May, with resistance of 6000, 6040, and 6130 May.