The new trading month of August has caused the cotton market to spike higher Monday. Concern that hot-and-dry conditions are now embracing the length of the cotton belt, from West Texas to Georgia. Thus, new crop December posted triple-digit gains in the face of those forecasts. As it stands, the December market is less than 1.25 cents from knocking the July high of 64.90 cents.
Monday afternoon USDA will issue its latest crop condition data. The last report showed the national crop at 49% good to excellent, which is below the five-year average of 60% good to excellent. However, last week also revealed Texas with dynamic improvement to the lower end of her crop. That is the very poor to poor categories declined some 11 percentage points. Clearly, Monday’s numbers may feed into this current weather rally.
In other concerns, the market will see export sales on Thursday, along with weekly jobless claims. Lastly, on Friday, the all-important jobs/unemployment data will be reported by the Labor Department. If the number indicates real declines, the market will assume the U.S. economy is reopening better than expected, and hopefully the demand for apparel.
For Monday, December cotton closed at 63.87 cents, up 1.21 cents, March finished at 64.54 cents, up 1.29 cents and December 2021 ended at 63.30 cents, up 0.82 cent. Estimated volume was 29,705 contracts.