COTCO wants to send market news and weekly USDA reports as follows:
Cotton prices soared nearly 1% after a series of strong sales data from USDA last night ignited renewed optimism about exports.
- March futures rose 78 points to close at 86.39 c/lb;
- May futures contract rose 76 points to close at 87.10 c/lb;
- The net effect leaves ICE March – ICE May difference unchanged (at 71 pts);
- March open interest (OI) dropped to about 78k while total open interest was little changed at around 210K.
For the week ending January 27, the US sold 171,200 bales for crop 22/23 (down 20% from the previous week) but export reached 212,200 bales. Note that nearly all new sales go to China (mostly) and Turkey. The recent surge in interest in U.S. cotton is largely due to the good quality available and inventory for sale.
- Economic News
Fed on Wednesday raised interest rates by 0.25 percentage points. Although the Fed has not signaled a pause in rate hikes yet, investors are excited that the rate hike continues to decline and Fed Chairman Jerome Powell’s acknowledgment that inflation is de-escalating.
The US Department of Labor’s January jobs report will be released today and experts predict that the US non-farm sector created 300,000 jobs last month. This is a large number of jobs, which means that Fed will continue to raise interest rates to “cool down” the economy to bring down inflation.
The European Central Bank (ECB) and the Bank of England (BOE) announced their decision to raise interest rates on Thursday, with a 0.5 percentage point jump in interest rates applied by both.
These statements boosted investor optimism that central banks will soften this year.
The market has fresh data to trade, and the 80.00 – 90.00 range is forecast to hold.
The May contract is forecast to meet resistance near 89.65 – 89.92 and support near 81.65 – 82.36. 