The US upland cotton sales should slip in USDA's weekly export sales report after prices rebounded from recent lows, cotton brokers said on Wednesday
They said that the US net upland cotton sales will probably range from 250,000 to 300,000 running bales (RBs, 500-lbs each), down from sales in last week's report of 566,700 RBs.
"I don't think we'll see the huge sales we've seen recently. Most of that business was done when prices were at 64 to 67 (cents). Now, we're up to 4.00 cents higher," a broker in the US Southwest said, referring to the spot March futures contract.
March cotton settled Tuesday at 69 cents a lb.
As usual, attention will be focused on the pace of Chinese cotton purchases. Heavy buying by China propelled prices in October 2003 to their highest level since late 1995.
"I think we may still see more buying by China because they simply need the cotton," one analyst said.
Total Chinese purchases so far in the 2003/04 marketing year (August/July) have reached 3.99 million RBs, well above the 922,200 RBs China had bought by this time last year.
Traders are paying closer attention to the pace of US cotton shipments. Most estimated a range of 240,000 to 300,000 RBs, against 287,100 RBs in last week's USDA report. Some forecast it would be as low as 200,000 RBs.
"That's the only fly in the ointment in the US cotton exports. We need to see shipments above 300,000 (RBs) if we are to hit the USDA target," a broker in the US Delta said.
USDA, in its monthly supply/demand report, has forecast US cotton exports in 2003/04 at a record 13.2 million (480-lb) bales. Last year, US cotton exports hit 11.9 million bales.