The cotton market is trading materially lower Tuesday morning as increased producer sales, plus an overbought chart condition is bringing out the sellers. The market will be closed on Thursday for the observance of Thanksgiving and will trade an abbreviated session (8 a.m. to 1:30 p.m. EST) on Friday.
USDA reported the 2020 crop is now 77% harvested. This number compares to the year ago number of 75% gathered and the 5-year average of 71% complete. The recent number suggests the peak amount of the crop is weighing on the market’s prices.
Additionally, overnight rains occurred in some dry areas of South America, sending U.S. beans lower Tuesday morning. Their negativity is having an in-kind bearish response on cotton.
There were 78 additional deliveries made against the spot December contract. The issuers were Wells Fargo with 21, Term Commodities with 50, and Dorman with 7. Stoppers were SG Americas for 76, and Marex for 2. December cotton expires on December 8.
For Tuesday, support for March cotton stands at 72.00 cents and 71.20 cents, with resistance at 74.30 cents and 75.00 cents. The overnight estimated volume is 14,345 contracts.