The cotton market finished the day higher, even though spot crude oil is trading below zero. In fact, spot May oil is trading $25 under zero, meaning those long traders are paying someone else to take their oil contracts from them. Such has never been seen in the history of markets.
For now, traders are treating the bizarre situation as an isolated incident, but it could be the tipping point of other markets falling as well.
Monday afternoon, USDA will publish its weekly planting progress numbers. Per planting history, there doesn’t seem be any impediment to current planting activity.
The market is also looking ahead to Thursday’s weekly supply and demand data. Hopefully there will be no more cancellations, but certainly that is possible. For now, traders in all markets are stepping back to take an assessment of crude’s negative trade. For now that meaning has to reflect an attitude of “who knows?”
Monday May cotton closed at 54.03 cents, up 1.26 cents, July ended at 54.02 cents, up 1.16 cent and December finished at 56.33 cents, up 1.07 cents. Estimated volume was 28,680 contracts.