DTN Morning Cotton Commentary          02/05 07:45

   Cotton Remains Bearishly Defiant 

   The cotton market remains firmly entrenched in its negative mode. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market remains firmly entrenched in its negative mode. Its open 
interest continues to swell and attitudes remain sour. In fact, one market 
assessment research group now pegs the market with a 12% favorable reading, 
meaning 88% of all other participants are negative toward the commodity. 
Hopefully, the forthcoming reports can sway opinions and prices.

   USDA just released its weekly Export Sales and Shipments report with the 
following numbers:

   "Net sales of Upland totaling 249,800 RB for 2025/2026 were up 23 percent 
from the previous week, but down 5 percent from the prior 4-week average. 
Increases primarily for Vietnam (54,000 RB, including 600 RB switched from 
South Korea), Pakistan (48,100 RB, including decreases of 2,200 RB), China 
(36,600 RB), Turkey (32,800 RB), and Bangladesh (31,800 RB), were offset by 
reductions for South Korea (1,100 RB). Net sales of 114,900 RB for 2026/2027 
were primarily for Malaysia (52,800 RB), Indonesia (33,400 RB), Mexico (8,800 
RB), Nicaragua (8,800 RB), and Turkey (6,600 RB). Exports of 235,300 RB were 
down 9 percent from the previous week, but up 25 percent from the prior 4-week 
average. The destinations were primarily to Vietnam (84,300 RB), Pakistan 
(29,100 RB), Bangladesh (19,500 RB), Turkey (17,600 RB), and China (16,000 RB). 
Net sales of Pima totaling 3,200 RB for 2025/2026 were down 87 percent from the 
previous week and 79 percent from the prior 4-week average. Increases primarily 
for Costa Rica (1,300 RB), Djibouti (1,300 RB), Thailand (400 RB), Bangladesh 
(300 RB), and India (100 RB, including decreases of 1,800 RB), were offset by 
reductions for Italy (400 RB). Exports of 2,300 RB -- a marketing-year low -- 
were down 48 percent from the previous week and 68 percent from the prior 
4-week average. The destinations were primarily to China (1,500 RB), Colombia 
(300 RB), Thailand (300 RB), and India (200 RB)."

   March options will expire Friday on the close. Traders are anticipating how 
many puts and calls may expire in-the-money. Then spot March will enter its 
delivery period on Feb. 21. Traders and hedgers will have to vacate the 
contract the preceding Friday to avoid the notice process. 

   Also on Friday, the CFTC will update its Commitments of Traders Report. Its 
last release showed managed-money funds had net-sold some 13,000 contracts, 
increasing their overall bearish position to 65,000-plus. 

   Next week, the NCC will meet and release its 2026 acres survey on Feb. 12. 
Then on Feb. 23, the spot March contract enters delivery. 

   Certain weather forecasters report excessive heat and dryness that was 
plaguing Australia is breaking down. Still, the Down-Under cotton has been 
greatly stressed if not damaged. However, while the heatwave is subsiding, 
significant rains are not scheduled for a while. Turning to the U.S. situation, 
Texas needs moisture ahead of planting. In fact, the U.S. Drought Monitor 
showed an area representing 80% of U.S. cotton production as experiencing 
drought as of Jan. 27 versus 83% the previous week.

   Chart support for March cotton stands at 61.75 cents and 61.00 cents, with 
resistance hovering about 62.90 cents and 64.00 cents. Thursday morning's 
estimated volume is 26,951 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com or by calling 
(229) 890-7780.




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