Cotton Posts a Lower Tuesday
The cotton market ended Tuesday slightly lower on muted volume. Given the fact that the market has enjoyed five consecutive higher closings, for it to suffer a small setback was not only technical permissible but needed. Volume was 25,460 contracts. Overall, the market continues to ease higher, being driven by harsh Texas weather. Well over one-third of the Texas Crop is rated very poor to poor and future weather forecasts continue to promote below normal rainfall and above normal temperatures for the next two weeks.
The market is also uneasy about Thursday’s weekly exports-sales report. There are divided camps on whether China will continue as a strong net buyer of U.S. cotton, or soon initiate cancellations. Of late, it has been the dominate buyer of U.S. cotton in an effort to rebuild its state reserves, as demand for apparel products worldwide has declined due to the massive shuttering of homes and factories due to COVID-19. On the other hand, some traders have seen China buy massive amounts of soybeans and corn, thus they expect more cotton sales. Obviously, Thursday will give us the answer.
Spot July closed at 63.24 cents, up 0.17 cent, December closed 63.02 cents, down 0.12 cent, March ended at 63.76 cents, down 0.12 cent.