DTN Cotton Open: Slightly Lower as Market Attempts to Stabilize

Line of modules during cotton harvest. ©Debra L Ferguson

After its devastating limit-down trade of Monday, the cotton market is attempting to at least stabilize overnight. Monday’s hugely bearish cascading session, a massive volume of 80,000 plus contracts, was the result of the coronavirus scare becoming worse.

As long as the illness was essentially confined to mainland China, it was thought the balance of the world could carry on with some normalcy. However, new outbreaks in the Middle East and Europe are turning level-headed thinking into panic.

There were 45 notices delivered against the spot March contract last night. Morgan Stanley Commodities issued them all. Term Commodities, reportedly the trading arm of a major Tennessee shipper, stopped 35, and BNP took the balance. March cotton’s delivery period runs to its expiration date of March 9.

Thursday, USDA will issue its current round of export sales. Although last week’s data was somewhat lacking, still they were decent enough, considering the stout sales and shipments which have been occurring during the month of February.

For Tuesday, close-in support for May cotton is 66.84 cents, Monday’s low, and resistance will be at 69.25 cents, Monday’s high. Overnight estimated volume stands at 4,072 contracts.

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