DTN Cotton Close: Edges Higher on Weaker Dollar

©Debra L Ferguson Stock Images

December cotton fractionally lower even as the U.S. Dollar fell on Brexit woes and traders were prepping for December’s impending delivery. However, besides Brexit, there have been some rumblings the Federal Reserve may not be as aggressive in hiking interest in 2019 as global economy is beginning to weaken.

Specific for Cotton, the December contract will soon enter its delivery. Thus, traders have been exiting the soon expiring spot December and rolling out to the March futures. The last few days have seen a noticeable increase in the volume of the Dec-Mar spread. For the week, December cotton is down 1.97 cents.

Also Friday, USDA reported another round of slow sales and exports. Yet, what struck us about Friday’s data was the number of countries cancelling business, in addition to China’s “usual” cancellations. To that end, in two weeks the G-20 Meeting commences in Buenos Aries, Argentina. Supposedly, the U.S. and China have agreed to a sidebar meeting to discuss trade. In fact, comments from President Trump indicating no new tariffs are planned for China was interpreted by traders as friendly to the market.

Next week will see abbreviated trading. The market will be closed Thursday in observance of the Thanksgiving holiday and then trade a partial session on Friday.

December cotton settled at 76.12 cents, down 0.13 cent, with March at 78.29 cents, up 0.01 cent and December 2019 was 77.21 cents, down 0.09 cent. Friday’s estimated volume was 37,400 contracts traded.

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