The cotton market is higher Monday morning as it attempts to build upon Friday’s positive close. Last week saw the market trade up in response to Mother Nature’s cloudy, rainy conditions occurring across much of the southern cotton belt. Such conditions are an obvious detriment to the crop in terms of quality and quantity.
To that point, Monday afternoon USDA will release its latest update on the condition and harvest progress of the 2020 crop. Last week saw the crop at 45% good/excellent compared to its standing of 39% a year ago. However, given the 2020 crop is nearly 60% bolls open, its ratings could easily fall.
Last Friday afternoon, the CFTC released its commitment-of-traders information. The data showed another increase in the bullish position of certain managed-money speculators. Currently they are over 51,300 contracts net long.
The dollar is down today, while the Dow is up, based on the possibility of a new stimulus deal in Congress. At one time the Republicans wanted a $1.5 trillion package, while Democrats were seeking some $3.50 trillion. Rumor has it the two sides may settle on a $2.0 trillion package before the election.
Monday’s support for December cotton is 65.50 cents and 64.75 cents, with overhead resistance at 66.95 cents and 67.00 cents. The current estimated volume is 4,225 contracts.