Cotton Ends Higher as Grains Show Life
The cotton market finished Wednesday slightly higher, as the Chicago grains, over the course of the trading day, did manage to pare much of their initial losses. At the start of the morning, corn was down 15 cents, while soybeans were off 35 cents, but by the session’s close, corn had come back about 10 cents and beans had come up roughly 15 cents. Their recovery allowed cotton to resume its upward push.
Weekly export sales, normally out Thursday, have been delayed until Friday because of the MLK holiday. Currently, sales for the 2020-21 season have already surpassed USDA’s origination target. Also on Friday, CFTC will release its market data parsing out the positions between speculators and hedgers. As they stand, speculators are notably long in the market, while commercials, because of their hedging activities, are heavily short.
The cotton market also remains concerned over the expanded import ban the now-retired Trump administration had placed on cotton products originating from China’s Xinjiang province. The basis for those steep tariffs lies with the forced labor issues that western countries have with China. As of now, there is no word from the Biden administration whether said tariffs will remain or simply be discarded.
Wednesday, March cotton closed at 81.59 cents, up 0.44 cent, July settled at 83.28 cents, up 0.44 cent and December cotton ended at 77.95 cents, up 0.26 cent; estimated volume was 37,181 contracts.