DTN Closing Cotton            01/12 13:35

   Cotton WASDE Friendly, Not Bullish 

   Today's January Crop Report was basically friendly with lower production and 
ending stocks. However, it was not the bullish shot-in-the-arm the market was 
wanting. 

Keith Brown
DTN Contributing Cotton Analyst

   Today's January Crop Report was basically friendly with lower production and 
ending stocks. However, it was not the bullish shot-in-the-arm the market was 
wanting. Additionally, the grain numbers were demonstratively bearish, which 
likely curtailed any enthusiasm in cotton.

   USDA's breakdown of the January report is as follows:

   "The 2025-26 U.S. cotton balance sheet for January shows lower production 
and ending stocks compared to December. Beginning stocks, consumption, exports, 
and imports are unchanged. Production is reduced by over 2 percent from last 
month to 13.9 million bales primarily because of lower production across the 
Delta. The national average yield declined by 8 percent from last month to 856 
pounds per acre as a result of lower yields in the Delta and larger harvested 
area in the Southwest. With the smaller crop, ending stocks are reduced by 7 
percent to 4.2 million bales, or 30.4 percent of disappearance. The projected 
season average farm price is raised to 61 cents per pound. The January update 
of the 2025-26 global balance sheet shows lower production, higher consumption, 
lower ending stocks, and essentially unchanged trade compared to last month. 
The forecast for China's cotton crop is raised 1 million bales which is more 
than offset by reductions for India, the United States, Argentina, and Turkey, 
resulting in a reduction of over 350,000 bales to world cotton production. 
Global cotton consumption is raised over 300,000 bales as an increase for China 
is partially offset by reductions for Turkey and Nicaragua. Cotton trade is 
raised a negligible amount as higher imports by India are largely offset by 
reductions for Turkey and Nicaragua. Global 2025-26 ending stocks are revised 
downward by 1.5 million bales because of lower production, higher consumption, 
and reductions to India's 2024-25 production and ending stock estimates. As a 
result, the global stocks-to-use ratio is reduced to below 63 percent."

   There are several key economic reports this week, including Tuesday's CPI 
(consumer inflation), Wednesday's PPI (wholesale inflation), and Thursday's 
weekly export sales and retail sales. The Fed will be assessing the data for 
future interest rate considerations. 

   For Monday, March 2026 went out at 64.91 cents, up 50 points; July was 67.86 
cents, plus 55 points; and December 2026, closed at 69.27 cents, 44 points 
higher. Monday's estimated volume was 71,994 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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