December cotton is trading meekly on both sides of Friday’s close as it prepares for first notice day on Monday, November 26. However, with Friday being an abbreviated trading session as part of the long Thanksgiving break, many cash offices will be closed and trading desks will have reduced staff.
Thus, we understand cash merchants are requiring producers holding December positions to either liquidate or roll by this Wednesday’s close. To that end, we can see that very action unfolding now in the volume differences between Spot December and the March contract.
The Asia-Pacific Economic Cooperation ended on a negative note for the conference, and an embarrassing note for China. With the absence of President Trump, the Chinese were hoping to dominate the gathering, but faced stiff criticism from VP Pence and America’s allies over China’s obvious expansion efforts in the region. This action sets something of a negative tone for the G-20 meeting at the end of November.
USDA will issue another crop harvest report Monday afternoon. Last week saw copious amounts of rain across the Texas-Georgia Belt, delaying gathering effort as well as causing crop denigration. We will see if Monday’s data is reflective of that reality.
In other news, Friday’s COT report continues to show a trend in long liquidation. As of November 13, non-commercial traders were net long 47,698 contracts, a decrease of 3,600 contracts, while the combined non-commercial and non-reportable traders held net long position of 49,602 contracts, down some 4,370 contracts for the week. Moreover, total open interest now stands at a one year low.
Exchange deliverable stocks increased to 111,532, from the previous count of 97,898.
Close-in support today support for March cotton is 76.50 cents and 74.40 cents, with resistance at 79.25 cents.