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Cotton futures ended last week on a positive note, despite a few surprises along the way.
AI-assisted narration and summarization based on original reporting and data from PCCA.
SPEAKER_02
Welcome to Cotton Quick Take by PCCA, your short weekly update on the factors shaping cotton markets and the broader agricultural economy. Thanks for joining us. Let's take a quick look at what's moving the market this week. Cotton Futures ended last week on a positive note, despite a few surprises along the way. December Futures gained 166 points for the week, settling at 80.54 cents per pound. Prices started strong on Monday, but the biggest test came Friday when USDA unexpectedly raised its U.S. cotton production estimate. Here with more insight is PCCA's Director of Risk Management, Corey Smith.
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The WASTU report that was released Friday was a big surprise, and unfortunately, it wasn't a good one. The market was expecting a cut, and really the only question was how much are they going to cut it? Well, none was the right answer. They raised production and you saw the market immediately respond by dropping over 200 points in about 15 minutes. Thankfully, it rebounded as folks digested the number and realized that they didn't really trust it. And I wish the Wazi number was right, but based on the reports of what we're seeing coming in with harvesting getting started and the yield and the growing season we had, I just don't have much faith in it.
SPEAKER_02
The October report increased production to 13.44 million bales, pushing ending stocks to 3.8 million. Global supplies also increased, adding more competition to an already challenging export market. On the demand side, there were some encouraging signs. U.S. upland export sales totaled just over 165,000 bales, led by Vietnam, Pakistan, and India. China also booked cotton for the next marketing year, although consistent buying will be needed to strengthen the overall demand picture. Meanwhile, harvest continues across the cotton belt. Drier conditions have helped growers in West Texas, but rain and cooler temperatures could slow progress. Quality concerns are also growing in the Delta and Southeast following recent wet weather.
SPEAKER_00
Before we get back to Cotton Quick Take, here's a quick word from PCCA. With PullPlus, members can choose pull plus call or pull plus put pricing strategies for their share of production, giving you another way to respond to market opportunities. Learn more about PullPlus at PCCA.com slash poolplus. Again, that's pcc a.com slash poolplus.
SPEAKER_02
Looking ahead, Wednesday's inflation report could influence the US dollar in cotton prices. Traders will also be watching export demand, harvest results, and continued selling pressure across agricultural markets. Cotton showed some resilience last week, but the market still has to digest USDA's more burdensome supply outlook, whether those unnumbers hold up or not. Thanks for listening to Cotton Quick Take by PCCA. Be sure to join us next week for another quick update on the markets and the stories shaping the cotton industry.
