The cotton market was higher Thursday on strong sales and exports, but there was a tad of confusion. Initially, USDA indicated China was the buyer of 84,000 bales, but in a later update Vietnam was assigned that amount. To that end, we do not know what time the correction was made. At any rate the Market hurdled its January High and closed sharply higher. Today’s estimated volume at some 40,000-plus contracts.
The market also ignored a resurgent U.S. dollar Thursday. Wednesday, when the Federal Reserve announced its schedule of limiting interest rate hikes over the next two years, the dollar promptly broke. Yet, on Thursday it came back recouping its losses of Wednesday and then some. The basis for Thursday’s turnaround was the idea the savvy global investor wants dollar dominated assets only. Thus, traders saw the decline as a buying opportunity.
Friday, we will see how the cotton market sorts out what we think is an informational glitch. However, glitch or not, a ton of money changed hands in the market’s action Thursday.
May cotton settled 77.18 cents, up 1.68 cents, July was at 78.03 cents, up 1.47 cents and December closed at 75.33 cents, up 0.34 cent.