The cotton market is trading both sides of unchanged as the approach of a new month is creating a bit of profit-taking. Managed-money speculators have been net-long this market for many months and as the end of the year is closing in, they may be more amiable to book profits. Still, March cotton closed higher for the second week in a row and posted its highest weekly close basis the nearby contract since April 2019.
Traders reacted bullishly to Friday’s delayed weekly export sales report. That data showed U.S. cotton export sales for the week ending November 19 with 354,689 bales sold for 2020/2021 and some 38,500 for 2021/2022 for a total of 393,169. This was the highest weekly sales number since September 10 and the second highest since the marketing year began on August 1.
Cumulative sales for 2020/21 have reached 9.588 million bales versus 10.121 million last year and 9.517 at this point in 2018. Cumulative sales have reached 71% of the USDA’s forecast for the marketing year versus a five-year average of 60%.
Monday afternoon, USDA will update its 2020 harvest data at 4 p.m. EST. Some rain fell across the Delta and the Southeast, which might have delayed gathering activities. Last week the harvest was running about 77%, very close to the ten-year average. We understand today’s report will be the last progress report to be issued by USDA until April of 2021.
December cotton remains engulfed in its delivery period. Monday there were 12 notices tendered against it. Term Commodities was the sole issuer, while SG Americas was the stopper. To date there have been some 224 contacts delivered against the spot month.
Close-in support for March cotton is 72.60 cents and 72.25 cents, with resistance at 74.25 cents and 75.00 cents. The current overnight volume is 3,245 contracts.