The cotton market is fractionally higher Tuesday as it awaits USDA’s 2020 acres data. That report is set to be released at noon eastern. The average industry estimate stands at 13.17 million acres, down from the March planting intentions of 13.70 million acres.
After the report is out, traders and hedgers will immediately focus on the current and forecasted weather situations. There is scant rain forecast for West Texas and the Panhandle for the next seven days. Moreover, with the market closed Friday for the July Fourth holiday, trading could become extreme late into Thursday’s session.
USDA reported the condition of the 2020 crop as improving Monday. Nationally, the crop is rated at 41% good/excellent up from last week’s 40%. Texas came up in the very poor/poor category 4 points from 40% to 36%. Georgia’s crop is rated 72% good/excellent.
There were no deliveries placed against the July contract. To date there have been 307 notices issued. July cotton expires July 9.
Next week USDA will attempt to offer more clarification of the cotton market with its monthly crop data. As it stands, the government has projected huge domestic and world carryouts. With the global pandemic upending so many countries, many traders are concerned over the plight of apparel demand.
For Tuesday, close-in support for December cotton stands at 59.00 cents and 58.80 cents, with resistance at 60.25 cents and 60.45 cents. The current volume is 3,204 contracts.