After a week of scary news and wild financial markets, the cotton market will end this week virtually flat from last Friday. This was a week where the market saw bearish planting intentions for 2020 from USDA (which forced a limit down) and better than expected export sales (which allowed prices to recover).
Of course, next week will be a new week, but with the same old driving force — the coronavirus,
Friday afternoon, the CFTC will publish its commitment of traders data. We know from previous reports, the speculator has converted to a net short position, but Friday’s information ought to reveal how deep a short position they carry. If it is an overly lopsided bearish concentration, then the market might see additional short-covering sometime next week.
Additionally, next week’s export sales will be hugely important as to whether foreign mills deny U.S. cotton. With nations, such as India, shutting businesses to stop the virus, many textile mills are either running reduced shifts or full closures.
The ultimate fear is with the price of cotton so low from the time of its original purchase, mills may be wanting to renegotiate, or worse, outright cancel old orders.
For Friday, May cotton closed at 50.98 cents, up 0.99 cent, July ended at 50.98 cents, up 1.22 cents and December closed at 52.08 cents, up 0.96 cent. Estimated volume was 44,896 contracts.