The cotton market continues to be characterized by tight ranges and low volume as traders await the next shoe to fall. That shoe may come in the form of Thursday’s Exports Sales and Shipments report. Whether it drops or not, remains to be seen.
Already 2019-20 sales have far exceeded USDA’s original forecast. Thus, the trade is torn between the possibility of seeing USDA increase domestic exports or witness the Chinese canceling previous sales. That data comes out at 8:30 a.m. ET Thursday.
There were no deliveries for the spot July Wednesday. To date, there have been 307 notices issued. July cotton expires at the close of Thursday’s trade.
On Friday, USDA will issue its latest supply-demand report. That will be the first crop report issued since the government reported way fewer acres for the 2020 crop. It is possible there will be lower carry outs both domestically and globally.
For Wednesday, support for December cotton lies at 62.80 cents and 61.85 cents, with key resistance at 62.70 cents, Monday’s high. The current estimated volume is 2,480 contracts.