DTN Cotton Close: Lower in Muted Trade

Cotton harvest near cotton gin with modules lined up in the gin yard. ©Debra L Ferguson

The cotton market experienced a very tedious session Thursday, with March cotton showing a trading range of less than 1 cent. The tug between decent sales and exports versus the potential for a second COVID-19 wave is keeping the forces of supply and demand in balance, or more accurately, in limbo. Thursday the market saw decent sales with China as the lead buyer with shipments exceeding last week. Additionally, the U.S. dollar continues to crater, but the cotton market is still trading in slow-motion.

Of course, the cotton market remains in the thick of its 2020 harvest. Just this week, USDA reported the crop was 84% harvest. Thus providing there is clear weather over the next two weeks, the gathering should be near complete.

Friday morning, the Labor Department will issue its jobs data for November. Expectations for non-farm payrolls are 469,000 versus last month’s 638,000 new jobs. The participation rate is expected at 61.7%, with the unemployment rates thought to be at 6.8% compared to October’s 6.9%.

Cumulative sales had reached 9.588 million bales, which is the second strongest in 10 years. They had also reached 71% of the USDA’s forecast for the marketing year versus a five-year average of 60%. ICE warehouse stocks fell to 112,728 bales on Dec. 1, down 4,570 from the previous session and the lowest they have been since Nov. 17.

Heading into Friday’s trade, for the week, March cotton is down 2.13 cents, for the month, it’s down 1.04 cents and for the year, it’s up 0.31 cent.

For Thursday, March Cotton closed at 71.11 cents, down 0.49 cent, July settled at 72.76 cents, down 0.48 cent and December 2021 ended at 70.28 cents, down 0.27 cent. Estimated volume was 23,163 contracts.

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