The cotton market ended Thursday with spot March higher and the deferred contracts lower, as producers continue to adjust their cash positions in front of Monday’s delivery period. Additionally, there was no definitive good news relating to the coronavirus outbreak.
For weeks, the cotton market — indeed virtually all commodities and financial markets — have been financially held hostage, adversely reacting to the push-and-pull moves of the coronavirus. For its part, China has taken incredible measures to contain the virus, ranging from quarantining millions of its citizens to closing factors, to stimulating its economy.
On Friday at 8:30 a.m., USDA will issue its weekly exports-sales. Since last November, sales have averaged some 250,000 bales per week. Last week’s amounts exceeded some 350,000 bales, with Vietnam taking 175,000 bales. Another dynamic number Friday ought to encourage cotton to trade higher not only Friday, but into next week.
The technical trend of the cotton market is sideways to higher. As it stands, the spot market is trading just north of its 200-day moving average, which is considered a key chart indicator for speculators. Of late, open interest — the total number of both sides of participants — has greatly diminished. Some analysts believe traders and speculators are repositioning themselves for the impending growing season.
For Thursday, March cotton settled at 68.75 cents, up 0.27 cent, July closed at 70.24 cents, down 0.23 cent and December finished at 70.04 cents, down 0.20 cent. Friday’s estimated volume was 42,432 contracts.