Cotton Ends Tuesday Mixed
The cotton market spent much of Tuesday in a countertrade from Monday’s higher trade, and essentially finished that way. However, March 2021 eked out a 0.01 cent positive close. Currently the market is trading counter-seasonally as various weather events are thought to be reducing the quantity of the 2020 crop as well as its quality. To that end, the crop has already faced several hurricanes and presently is dealing with an ice storm in Texas, wet weather in the mid-Atlantic states and Hurricane Zeta, which is scheduled to hit the U.S. Gulf Coast by Wednesday. That storm may bring unwanted rains to the U.S. Delta and the Southeast. Currently, the crop stands at 42% harvested versus last week’s 34% gathered, versus the 10-year average of 43% complete.
Technically, the market is overbought with certain indicators flashing extreme readings. Speculators are supposedly net long with some 65,000 contracts and some traders believe that makes the market vulnerable to a sell-off. Yet, Tuesday, December cotton posted a new high close.
The market is anticipating Thursday’s export sales report. Given the dollar has been on the ropes, traders continue to expect strong sales going forward. Last week sales were 227,000 bales.
For Tuesday, December cotton closed at 72.03 cents, down 0.08 cent, March settled at 72.73 cents, up 0.01 cent and December 2021 finished at 70.62 cents, down 0.14 cent. Estimated volume was 35,750 contracts.