The cotton market ended Tuesday’s session higher, but well off its top-end prices. Some traders are nervous over Wednesday’s inauguration ceremonies and would like to see additional congressional stimulus.
The U.S. dollar was down Tuesday. The market is in a steep decline and has become “oversold.” Thus a short-covering rally unfolded last week. Nonetheless, it is generally expected by currency traders the dollar will weaken further under the Biden administration.
Weekly sales and exports are delayed until Friday, as the observance of MLK day on Monday has delayed the normal calendar. Currently, U.S. cotton sales for the 2020-21 season are exceeding USDA’s target.
Last Friday the CFTC reported on the trading positions held by speculators and commercials. The data indicated the trend-following speculators had pared their long positions by 1,100, yet they remain stoutly net long. The commission’s data is as of Jan. 5 through Jan. 12.
Tuesday, March cotton closed at 81.15 cents, up 0.45 cent, July settled at 82.84 cents, up 0.47 cent and December cotton ended at 77.69 cents, up 0.67 cent; estimated volume was 33,586 contracts.