Spot March cotton was moderately higher Wednesday as near-term support held, thus encouraging shorts to cover or buy-in their positions. The market had been bouncing off a well-defined upward sloping trend-line for several days, but after another early test of that support Wednesday morning, the line held again causing prices to rally.
In fact, in a bizarre way of thinking — given the market was closed for MLK Day — we could say Tuesday was Monday for trading purposes, making Wednesday like Tuesday of trading. Thus, the market may have experienced a delayed turnaround Tuesday effect.
As a side bar to that rally, a large amount of cash cotton traded on “The Seam,” a merchant-producer website, on Tuesday. That cash trade might have encouraged the market higher as well. In fact, with the government shutdown still on-going, physical cotton trading on The Seam may be the only serious source to detect any sort of cash cotton movement.
Currently, the market is trading within a few ticks of its location on the day after Christmas. Such stagnation underscores how choppy the ICE Futures have become. To that end, the government shutdown has stopped the information flow to the market, and understandably, volume have tapered off and prices are sideways.
March cotton settled at 73.52 cents, up 0.39 cent, July was 76.11 cents, up 0.28 cent and December closed at 74.20 cents, up 0.01 cent. Wednesday’s estimated volume was 22,200-contract trade.