The cotton market stands a few ticks from hurdling the July monthly high of 64.90 cents. Continued hot and dry weather along with the bullish swell from outside financial markets are driving prices higher.
The 6 to 10 and 8 to 14-day weather outlooks are calling for renewed hot and dry conditions for West Texas. Additionally, similar punishing conditions are gripping the Southeast.
USDA just reported on Monday that six of the top seven cotton producing states are showing deterioration, and that was of last week. This week’s weather pains have yet to be tabulated and reported.
Hurricane Isaias hit the Carolinas and may have actually contributed more good news than bad. Reportedly, North Carolina received some 2 to 4 inches of much needed rain
Outside financial markets are pushing higher on the idea that a COVID vaccine may be at hand, as well the possibility of additional government stimulus. Stimulus funds are thought to be highly inflationary, eventually. Currently, the Dow Jones, gold, silver, crude oil, and Bitcoin are all substantially higher.
Thursday, cotton will see weekly export sales issued at 8:30 a.m. EDT. Expectations are for positive data to be reported. Thursday will be the last such report for the 2019/2020 crop year, and the possibility to see favorable adjustments is great.
Friday will bring the massively important jobs data from the Labor Department. If the reopening of the American economy is indeed happening, then such activity ought to be reflected in positive unemployment numbers.
For Wednesday, support for December cotton is 63.32 cents and 62.90 cents, with resistance at 64.90 cents and 65.80 cents. The current estimated volume is 4,865 contracts.