The cotton market is higher Wednesday morning as talks of an impending new stimulus are weakening the dollar. Reportedly, the Trump Administration and the House Speaker are edging closer to a new deal.
If this happens, it will put more money in circulation for the population to spend. That is the classic definition of inflation, too much money chasing too few goods. Ultimately, the buying power of the dollar gets diluted. The positive side of such weakness is the possibility of increasing exports.
Thursday USDA will issue its weekly export sales report at 8:30 a.m. EDT. Last week sales were off pace, but Pakistan and Bangladesh were seen as prominent buyers. Their participation suggests they are overcoming COVID-19, and along with other Asian countries, are revving up their economies.
For Wednesday, support for December cotton stands at 70.40 cents and 69.70 cents, with resistance at 72.00 cents. Overnight estimated volume is 12,700.