DTN Cotton Closing: Cotton Ends High

Defoliated cotton with unopen top bolls. Photo: University of Tennessee

The cotton market finished unconvincingly higher Tuesday, as traders dialed in a worsening crop situation and a bullishly surging Dow Jones. The Dow Industrials appear to be heading for a close over the 28,000 level, while the NASDAQ has already posted an all-time higher. The point for cotton is such outside bullish financial enthusiasm is too hard to ignore.

In more specific news for cotton were Monday’s crop conditions numbers from USDA. In quick summary, the report revealed nine of the top 15 cotton producing states showing deterioration. Wednesday at noon Eastern time, USDA will also issue its monthly supply/demand report. Last month the government pegged the crop at 17.50 million bales, but traders are collectively expecting the latest data to show a crop of 17.0 million bales. Exports are pegged at 15.20 million versus last month’s 15.0 million.

On Thursday, USDA will publish its latest export sales data. To that end, traders want to see how much, if any, unshipped cotton was rolled forward for the 2019-20 season to the 2020-21 season.

Gold and silver were massively lower Tuesday, which at least girded the dollar steady. The dollar had been falling since early July, but of late, its charts suggest some bottoming action.

December cotton ended at 63.49 cents, up 0.69 cent, March closed out at 64.33 cents, up 0.73 cent and December 2021 settled at 63.82 cents, up 0.75 cent. Estimated volume was 20,778, about half of Friday’s downward spiraling volume.

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