Cotton Ends Higher, on Charts, Weather
December cotton posted a milestone trade Friday by trading about the 70-cent mark. Of late, the market’s bullish action has been driven by certain technicals, such as its well-defined chart channel, and then by adverse weather events. The latter included Hurricanes Laura, Sally, and Delta, as well as peripheral conditions of cloudy and wet. The positive technicals include the trend-channel pattern, which originated on April 2, at 50.18 cents.
As prices began to climb, trend-following speculators noticed the unfolding action and began to reverse their position of being heavily net short (49,000 contracts) to their present position of being net long (53,000 contracts). Another weather concern relates to india. Newswires have it that the crop in India is experiencing punishing rains from its lingering monsoonal season. Typically, by this time of year, India’s monsoons have tamped down, but this year seems to be an exception. As of now, there are no loss projections being published. In other news, there are reports China has ordered its cotton mills to stop buying Australian supplies. This action is in response to Australia accusations that China is violating the human rights of the Uighurs. U.S. retails sales saw a huge year-over-year jump Friday morning. Receipts at clothing stores rose 11%, although total sales remained well below their pre-COVID-19 levels.
For the week, December cotton ended up 2.28 cents, thus far the month up 4.13 cents and presently stands 0.44 cent down on the year.
For Friday, December cotton closed at 69.92 cents, up 0.70 cent, March closed at 70.56 cents, up 0.63 cent and December 2021 finished at 69.52 cents, up 0.51 cent. Estimated volume was 32,711 contracts.