The cotton market ended its last full week of trading for the month of June lower on miserable volume. For the week, the December contract was off 31 points. At one time this week it was 200 points higher. Of course, the new crop is waiting to see how USDA will peg 2020 acres next Tuesday when it releases its Planted Acreage data. As it stands, the top industry average guess is 13.10 million acres, give or take.
However, on Monday the government will also report on the condition of the crop. Texas is struggling as its last report indicted 40% of the crop was rated very poor to poor. Since that time there has been scant rain with none really forecast for the next several days.
Thus, a production problem may be in the making. Unfortunately, USDA has projected new-crop carryout, both domestic and world, to dramatically increase as COVID-19 has impaired demand.
Although the U.S. Dollar Index is well off its March highs of 104, it is currently steadying itself sideways. A key reason is the uptick in COVID-19 infections. Despite the potential for zero interest rates, and more civil unrest, the world still sees America as the safe haven of last resort. Thus, the belief is, the U.S. will overcome its COVID-19 troubles and return to being the premier economic power on the planet.
Today, July cotton closed at 60.55 cents, off 1.26 cents, December settled at 59.50 cents, down .20 cent, and March finished at 60.16 cents, minus .16 cent. Friday’s estimated volume was a miserable 8,887 contracts.