DTN Closing Cotton            03/27 13:30

   Cotton Keeps Climbing 

   The cotton market was higher again Friday, although somewhat restrained.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market was higher again Friday, although somewhat restrained. 
There is an underlying belief that global high-priced fuels and fertilizers 
will result in smaller global yields of various agricultural crops, including 
cotton. In addition, the U.S. Cotton Belt is suffering wide-spread drought 
conditions.

   Friday at 3:30 p.m. EDT, CFTC will issue its Commitments of Traders report. 
At last count, the CFTC reported managed-money funds were net-short some 40,000 
positions, about one-half their record peak of 81,000-plus contracts.

   Next Tuesday at noon EDT, USDA will issue its all-important 2026 Prospective 
Plantings report. For that report, average trade expectations are 9.229 million 
acres, with a range of 9.000 million to 9.635 million. This compares to 9.283 
million in 2025, 9.400 million from the February Outlook Forum, and 8.99 
million from the National Cotton Council's membership survey.

   Cumulative sales have reached 85% of the USDA's seasonal target versus the 
five-year average of 97% for this point in the marketing year. Shipments 
totaled 400,552 bales, up from 273,926 the previous week. The biggest buyer was 
Vietnam at 61,420 bales, followed by Pakistan at 24,014.

   The National Climate Prediction Center is seeing expanding drought 
conditions across western U.S. and for parts of the U.S. Plains. Likely during 
June through August, an El Nino event is forecasted (62%) could emerge and last 
till 2027. That event might bring wetter conditions across the U.S. Cotton 
Belt, but hot and dry conditions across swaths of the U.S. Midwest. Currently, 
the Center shows 91% of the U.S. Cotton Belt is suffering drought conditions, 
up from last week's reading of 90%.

   Two major U.S. banks continue to forecast reduced U.S. yield due to reduced 
fertilizer availability and higher costs. Disruptions to nitrogen fertilizer 
supply through the Strait of Hormuz is the main reason. Fertilizer shortages 
may lead to growers cutting corners on marginal land. The Fertilizer Institute 
reports U.S. farmers typically import up to 50% of urea fertilizer, but this 
year the supplies are hovering around 25% below typical levels.

   For Friday, July closed at 71.70 cents, up 18 points; December 2026 closed 
at 74.02 cents, plus 38 points; and March 2027 finished at 74.94 cents, 31 
points higher. Friday's estimated volume was 104,167 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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