Cotton was sharply higher Monday, as the market entered this new week heavily oversold. Supposedly, not only do speculators carry a record net short position, but the December market posted contract lows in three out of five sessions. This bearish behavior tighten the “technical rubber band” all the more. Additionally, remnants of once Hurricane Barry dumped copious amounts of rain across the U.S. Delta, potentially damaging the local crop.
The market opened higher last night and eventually gained some upside momentum once speculators saw no new lows were in the offing. Yet, prices halted right at a previous resistance line, pulled from the May Monthly Low over to the June Monthly Double Low. Volume Monday was 19,500 contracts, which was less than Friday and Thursday’s amount.
Monday afternoon, USDA will print its current crop condition data, but any purported damage from Barry will not be evident in the report.
Tuesday, the Federal Reverse will meet and announce its latest policy on U.S. interest rates. The financial markets are anticipating a quarter-point reduction on Wednesday, but then again, the Fed may surprise all participants.
December Cotton closed at 63.95 cents, up 1.75 cents, March finished at 65.00 cents, plus 1.26 cents and December 2020 ended at 66.40 cents, up 0.84 cent. Volume was 19,494 contracts.