DTN Cotton Closing: Cotton Sharply High on Jobs Data

Defoliated cotton with unopen top bolls. Photo: University of Tennessee

The cotton market ended sharply higher Friday as the unexpected bullish jobs report suggested the U.S. economy is indeed mending.

The cotton market ended sharply higher Friday as the unexpected bullish jobs report suggested the U.S. economy is indeed mending. The 2.5 million jobs created for the month of May was the single largest monthly improvement in history. The recent up-move has been sparked by weary net short speculators buying back their positions, but Friday’s economic news absolutely sent them to the exit doors. Additionally, when Thursday’s market was able to slough off Thursday’s bearish export sales and closed virtually unchanged, that was yet another bullish signal. Thus, this week’s trade was the best in two years. For the week, spot July was up over 4.20 cents.

Next week the market will face fresh supply-demand data, options expiration and export sales. In addition, the upcoming weather forecasts still indicate hot and dry conditions building across West Texas. Traders will also be keying on Cristobal, a storm just now starting to build in the Gulf.

Friday afternoon the CFTC will update its Commitment of Traders data. It is expected to show bearish speculators are very close to being even. The rally in price, coupled by a rise in open interests, indicates the rally was done on shorts buying.

July cotton closed at 61.79 cents, up 1.79 cents, December finished at 60.98 cents, up 1.40 cents and March ended at 61.39 cents, up 1.17 cents. Estimated volume was 65,425 contracts.

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