DTN Cotton Open: Firm on Technicals

Cotton harvest - row of pink wrapped modules. ©Debra L Ferguson

The cotton market is higher Thursday on follow-through buying from Wednesday. After a wild two-side ride last Friday-to-Sunday-to-Monday, the market is right back up technically attacking its weekly high of 65.85 cents. Short-sold speculators are electing to cover; bullish slanting traders are buying breaks.

Besides the feeding off the technicals, some traders are wary of the Texas crop. The talk is of the freeze from last weekend and if it did more damage than first thought. Additionally, the portions of the Southeastern harvest, as well as the Delta will be slowed by a cold front, which is potentially bringing rainy and sloppy weather.

Generally speaking, global traders and investors are more positive this morning. The news that a successful Brexit deal has been struck has most financial and commodities markets stoking higher. The U.S. dollar hit a seven-week low overnight with slightly poorer U.S. retail sales data out late Wednesday.

Other U.S. economic data due today include the weekly jobless claims report, the Philadelphia Fed business survey, new residential construction, industrial production and capacity utilization.

As a reminder, USDA’s weekly sales and exports are delayed until Friday morning due to the Columbus Day closure Monday.

For today, close-in support for December cotton stands at 63.70 cents and 63.10 cents, with immediate overhead resistance at 65.85 cents. Overnight estimated volume is at 4,695 contracts.

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