DTN Cotton Close: Sharply Higher on Weather, Plantings

©Debra L Ferguson Stock Images

The cotton market finished Monday strong. With the U.S./China trade talks in limbo, the weather news was able to take front-and-center attention. To that end, the U.S. Delta remains overly wet, Texas is wet and suffering hail storms, and the Southeast is beginning to melt.

USDA will publish its latest round of planting progress data this afternoon at 3 p.m. CDT. Last week, the Delta was way behind of its historical planting norms and there has been little let-up since that time in Mother Nature’s adverse antics. Thus, that area may be lagging all the more. Of course, what will not be shown is condition of various sections of the Cotton Belt.

That data begins around the second week in June, but if it were issued today, we would think it would show a crop going backwards.

The market is dealing with a severely oversold technical condition. Most widely used chart indicators have the market residing in a deeply oversold state. In fact, these bearish readings have led speculators to rethink their attitudes and trading positions. It is thought they have flipped from a former net long to their current net-short stance.

This new position may be the fuel needed to send the market higher once certain fundamental dynamics, such as a China trade deal or some crop concerns, emerge.

For Monday July cotton settled at 67.91 cents, up 1.92 cents, December at 67.65, up 1.27, March finished at 68.48, up 1.10. Monday’s estimated volume was 29,800 contracts.

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