The cotton market finished February down 7.51 cents on the week and 6.82 cents down on the month. The irony of the market is exports-sales for the month were very strong. Of course, the big, bad influence of the market remains the coronavirus. To that end, what information can we say that hasn’t already been said?
Yet, we do feel the next three weeks are critical as to whether the illness gains a wide foothold in the United States, or not. The unprecedented decline in the Dow Jones and related equity makers has been the single bearish factor for cotton this month.
The World Health Organization has upped its ante on coronavirus suggesting most countries on the planet will be infected. However, the U.S. has yet to have one fatality, and supposedly infections are going down in China.
Monday will commence a new month and with that the market will see new supply-demand numbers on Tuesday, March 10. Some traders are looking for USDA to increase its domestic exports category. Additionally, the market will be keen on the month’s forthcoming exports-sales reports. The general thought is once the Dow calms, the cotton market may very well experience a comeback from its supremely oversold status.
Friday afternoon the CFTC will report on the status of the various market traders. The speculative position will be interesting to see, given how they had turned net long weeks ago.
For Friday, May cotton settled at 61.49 cents, down 1.01 cents, July finished at 62.27 cents, down 1.01 cents and December ended at 62.44 cents, down 0.81 cent. Estimated volume was 72,522.