The cotton market closed out Tuesday on a slightly positive note, and the ruckus in the financial makers was toned down. Thus, cotton was able to end its five-day losing streak. As it stands, managed-money speculators continue to hold long, as the 2020 crop was recently lowered in size and adverse weather events are on the rise. Just last week, the market had to deal with Hurricane Sally, while this week there is Tropical Storm Beta in Texas, plus a potential disturbance gathering at the tip of Florida.
The market is watching the apparent reversal that seems to be occurring in the U.S. dollar. The greenback had been tanking for some time, but improving political polls for President Trump, plus renewed COVID-19 worries in Europe have caused Forex traders to shun the major currencies, while buying the dollar. A stronger dollar is typically considered to be a bearish to U.S. exports.
Weather-wise, the six- to 10-day forecast shows much of the Cotton Belt will see below normal temperatures. On the other hand, Texas should experience below normal rainfall, while the Delta and the Southeast will tend to have above normal precipitation.
December cotton closed at 65.54 cents, up 0.30 cent, March closed 66.47 cents, up 0.23 cent and December 2021 cotton finished at 65.95 cents, 0.20 cent higher. Estimated volume was 16,149 contracts.