The cotton market closed hugely higher Thursday as it chose to emphasize on the hope of China over the fact of its fundamentals. Both of Thursday’s reports dealt out some bearish news for cotton. Initially, weekly sales and exports saw only double-digit numbers sales. That is, weekly sales were a mere 74,000 bales and China cancelled some 20,000 bales. Next came the monthly supply-demand report, which showed domestic ending unchanged at 7.20 million, and an increase of global carryout of 1.35 million bales. Superficially, the number were construed as negative.
However, the market sloughed off that negativity to nearly trade limit-up. Overnight, President Trump delayed his October 1 tariffs until October 15, as a gesture of good will. China then begin making inquiries into the price of soybeans and pork. Thus, cotton is hopeful it is in line to benefit from new Chinese business.
As the market enters its Friday session, new crop cotton is up 3.40 cents for the week, with obviously most of that move occurring Thursday. That is enough of a move to spook some of the short-sold speculators to rethink their positions.
For Thursday, December cotton closed at 62.21 cents, up 2.84 cents, March cotton ended at 62.58 cents, up 2.54 cents and December 2020 finished at 64.65 cents, up 2.20 cents. Thursday’s estimated volume was an astounding 62,166 contracts.