DTN Cotton Close: Sharply Higher on China, Weather

Mature cotton bolls in early morning light. ©Debra L Ferguson

The cotton market was sharply higher as early optimism turned to midday Friday euphoria concerning the U.S.-China trade talks. At one point on Thursday, the Chinese were set to pack and leave, but an invitation from President Trump to talk again was accepted and thus both delegations will meet at 2:45 eastern time Friday. The hope of a trade deal, even a skinny one, cruised the Dow up 400 points. Naturally, many of the agricultural futures also shot higher. In cotton’s case, it nearly traded limit-up.

Another bullish push for cotton was the cold weather with its accompanying freezing temperatures across the Texas panhandles. Given the delayed plantings for this area in the early spring, it is hard to assess how much cotton is actually vulnerable to such an adversity. Nonetheless, the ICE futures love a good weather story and apparently this one was worth a few points in the trade.

Sunday night’s cotton opening ought to prove interesting, as by that time, the major news wires will have digested whatever agreement headlines to come out of Friday afternoon’s U.S.-China meeting.

For Friday, December cotton settled at 63.88 cents, up 2.46 cents, March finished at 64.45 cents, up 2.37 cents and December 2020 closed at 65.41 cents, up 1.29 cents. Estimated volume had a booming volume of 63,239 contracts.

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