The cotton market has posted new life-of-contract highs Thursday morning, reflecting strong global equity markets and the acceleration of COVID vaccinations that will soon ramp up. However, the market remains in an overbought technical condition, and traders are wary of the recent ban of Chinese textile imports for the Xinjiang Province
Cotton is also being supported on the idea that new, untethered amounts of stimulus will soon pass the Congress. Such action is considered to be highly inflationary. If so, the U.S. dollar will likely weaken, enhancing the potential for greater U.S. agricultural exports. Moreover, such a stimulus is expected to give people more money to spend on their food and fiber needs.
Weekly export sales are delayed until Friday at 8:30 a.m. EST. Traders are keen to see if another round of big sales are reported. As it stands, current crop year sales have exceeded USDA’s forecasts.
For Thursday, close-in support for March cotton is 81.40 cents and 81.05 cents, with resistance at 83.25 cents and 83.75 cents. The current estimated volume is 13,108 contracts.