After Thursday’s strong showing, the cotton market is moderately higher Friday morning. However, it needs further confirmation that a true trade deal has been agreed to. To that end, overnight news says a trade deal has been struck, in principle, but there has been no official confirmation from the Chinese government.
Thursday’s export sales totaled some 284,000 bales for both marketing seasons. Top buyers were Turkey, Pakistan, and Vietnam. Current season sales have now reached 71% of USDA’s forecast for the 2019/2020 crop year.
Friday afternoon, CFTC will publish its latest data on the makeup of the market in terms of speculators and hedgers. Managed money speculators have been net short for nearly a year, sometimes reaching record net short levels. However, in their last reported position, they are roughly net short some 5,600 contracts. It will be interesting to see if cotton’s recent upward move has pared their bearish position.
For Friday, support for March cotton is 67.15 cents and 66.20 cents, with resistance at 69.00 cents and 69.50 cents. Overnight estimated volume is 11,805 contracts.