The cotton market is higher Monday morning as traders are beginning to sense last Monday’s high of 65.85 cents will be hurdled. Remnants of Tropical Storm Nester, which did little damage to the Southeastern crop, did complicate harvesting activities. To that end, Monday afternoon USDA will issue its latest crop harvest progress data, but for the most part, Nestor’s effect will not be reflected. Last week, the 2019 crop was 32% gathered.
There was a military flare-up between Pakistan and India over the weekend. The two countries have been long divided over the province of Kashmir. The trouble dates back to the days when the British left India, but created Kashmir as a mainstay Muslim area.
In recent years the situation became so intense, India stopped trading with Pakistan. That action forced Pakistan to buy U.S. cotton. This weekend’s shelling from artillery killed some nine Indian soldiers and civilians, as well as some Pakistanis. A huge and scary complication is, in addition to their unrelenting hate for one another, both nations have nuclear weapons.
As of October 10, cumulative sales stand at 59.5% of USDA’s forecast for the 2019/2020 season versus the five-average of 5.08%. Last week saw total sales of 206,000 bales, with Vietnam, Pakistan, and Bangladesh as the top buyers.
Recent commitment-of-traders data indicates speculators hold 11,400 contracts net short. This is a far cry from their top bearish position of 49,000 net short contracts back in the summer.
For Monday, close in support for December cotton stands at 64.50 cents and 63.49 cents, with resistance at 65.85 cents and 67.10 cents. Overnight estimated volume is 6,285 contracts.