Cotton is trading lower on supply/demand report

In Grain Futures | Market Analysis | Softs Futures
by John Flanagan at 9:37 am on January 12, 2012

Cotton prices were steady ahead of today’s reports. The USDA supply/demand report for cotton was bearish given that US exports were cut by 300,000 bales, more than offsetting a reduction in production of 153,000 bales. World figures were bearish. World production was cut by 580,000 bales but world use was cut by 1,350,000 bales which increased world ending stocks by 680,000 bales. Weekly export sales of cotton were 93,900 rb. Shipments were 169,300 rb. Both decent figures. The US Dollar Index is down 38 points this morning at 81.34. Crude oil is up 70 cents at $101.57. March soybeans were up 8 ½ cents overnight at $12.06. The soybean supply/demand report was bearish for soybeans. Production was increased 10 million bushels while exports were reduced by 25 million bushels which increased ending stocks by 45 million bushels. Export sales of soybeans were 433,900 tons, within expectations. March corn was up 6 cents overnight at $6.57 ½. The corn supply/demand report was bearish in that the ending stocks were not reduced as much as the trade expected. Exports were raised by 50 million bushels but that was offset by a 48 million bushel increase in production. USDA did reduce Argentina’s corn crop by 3 mmt, but we believe that is just to show the direction of that drought ravaged crop. Further reductions will likely be made in February and March. Export sales of corn were 321,500 tons, slightly below expectations. March wheat was up 6 cents overnight at $6.47. Wheat export sales were 365,200 tons, within expectations.

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