Spurred on by good export sales and recovery in the energy complex, the cotton market finished the day with triple-digit gains. In fact, at one time, spot May traded beyond the normal 3-cent limit.
Thursday’s limit was 4 cents because both December and March were limit-down Wednesday. Thus, under exchange rules, when two of the first five contract months “go limit,” then the range expands to four cents.
Earlier Thursday morning, USDA reported less than dynamic exports-sales, yet, they were decent enough. That is, when both crop years are added together, sales nudged the 260,000-bale mark. Both China and Vietnam were steady buyers.
Of late, the U.S. dollar, U.S. treasuries and the Japanese yen have become the safe haven markets. In fact, the dollar is trading above par (100), which makes it a detriment to U.S. exports. Still, the fallout and the adverse effect from the coronavirus on the U.S. and world is resulting in all the old economic rules to be tossed out the door.
For Thursday, May cotton settled at 49.99 cents, up 1.58 cents, July finished at 49.76 cents, up 1.54 cents and December ended at 51.12 cents, up 0.71 cent. Thursday’s estimated volume was 54,500 contracts.