December cotton is modestly higher, encouraged by rebounding outside financial markets. Overnight, the Turkish lira stabilized which is causing the dollar to fall, but allowing the Euro, gold, and the Dow Jones to rally. Additionally, Chicago grains are up as well.
Yesterday’s three hundred point plunge in cotton was somewhat influenced by Friday’s bearish supply-demand data, but it was more so by the currency crisis unfolding in Turkey.
In USDA’s weekly crop condition report the nation’s cotton crop was essentially unchanged. Overall the crop is rated 40% good/excellent vs last week’s 40%. Georgia’s crop stands at 67% good/excellent, while Texas’ crop is 20% good/excellent. However, Texas worsened as a huge portion of its crop stands 52% very poor/poor.
Today may be an exercise in Turnaround Tuesday, a phenomenon in which the market often trades on Tuesday opposite to its action on Monday. Still, the sentiment remains one of negativity influenced USDA’s August crop data and Turkey.
Close-in support for December cotton stands at 8200 and 8150, while resistance may be found at 8530 and 8770. Estimate overnight volume is 4700 contracts.