After taking a 2-cent nose-dive about 6 a.m. Tuesday morning, the cotton market spent much of the day slowly regaining lost ground. Part of that initial selling came from speculators who were exiting ahead of the Thanksgiving holiday. The market will be closed on Thursday but will trade an abbreviated session on Friday. On Friday morning, USDA will release its delayed export sales report. Another source for Tuesday’s selling was producer fixations. With USDA now reporting the 2020 crop is approaching 80% harvested, producers have become willing sellers of their crop above the 70-cent or higher mark.
The Dow Jones broke through its 30,000 mark, posted two weeks ago, amid political motions the Trump administration is allowing the transition to the Biden administration to proceed. Additionally, the states of Michigan and Pennsylvania have certified their elections for Biden. A higher Dow somewhat peripherally supports such markets as copper, lumber and, of course, cotton.
The one- to five-day forecast calls for the potential of heavy rainfall for eastern Texas, stretching across into the U.S. Delta. Most other cotton states are forecasted with normal rainfall.
ICE exchange stocks climbed to 121,046 bales on Friday, up from 107,126 the previous week and the highest they have been since March 8, 2019. To that end, there were additional deliveries and re-tenders Tuesday against the spot December contract. Tuesday some 194 notices have been issued for the spot month.
March Cotton closed Tuesday at 72.98 cents, down 0.82 cent, July 2021 settled at 74.47 cents, down 0.77 cent and December 2021 ended at 71.03 cents, down 0.47 cent. Estimated volume was 27,072 contracts.