The cotton market is materially higher Friday morning as its long-standing trend remains intact and outside agricultural markets are higher. Even as December cotton enters its Monday delivery, speculators are looking ahead to 2021. They see strong grain markets, plus a massive amount of government liquidity sloshing about the global economy.
Cumulative sales have reached 68% of USDA’s target for the 2020/2021 season compared to the five-year average of 58% sold. Numerically, sales stand at 9.20 million bales, down from 2019’s 9.85 million, but up on the five-year average of 7.72 million bales.
On Monday USDA will update the progress of the 2020 harvest. Some analysts are suggesting those gathering efforts will have reached the 75% mark by this weekend. Also on Monday, the ICE exchange will report on December’s delivery period. Certificated stocks increased to a level of 118,304 bales on Wednesday, as some 4,300 bales were added. Deliverable stocks are the highest since March of 2019.
For Friday, support for March cotton stands at 71.70 cents and 70.60 cents, with resistance at 72.75 cents and 75.00 cents. The overnight estimated volume is 9,535 contracts.