Cotton Ends Lower on Bull News
The cotton market finished its Thursday session lower despite the appearance of massive weekly sales. In its latest update, USDA reported some 519,000 bales were sold last week, with China in for 400,000 of those bales. However, the dynamic news did not bullishly affect the market. In fact, since last Friday, the market has seen USDA shave over 1 million bales off its 2020 crop estimates, Hurricane Sally form and hit the Southeastern crop and now there was the dramatic export sales report. Quizzically, those combined friendly reports have failed to move cotton’s bullish needle higher.
The U.S. dollar was lower Thursday, as it reeled from the negative Federal Reserve policy of keeping interest rates at near zero till 2023. That announcement came on Wednesday in the Fed’s two-day meeting. A weaker dollar is considered a positive enhancement for U.S. exports as it requires less of the other country’s currency to be converted into U.S. dollars.
As the market enters its Friday trade, December cotton stands 1.04 cents higher on the week, 0.69 cent up on the month and 4.51 cents down on the year. However, at one time, December cotton was down over 20 cents this season.
For Thursday, December Cotton closed at 65.85 cents, down 0.52 cent, March closed 66.79 cents, down 0.39 cent and December 2021 finished at 66.18 cents, down 0.12 cent. Estimated volume was 20,804 contracts.