After its bearish trouncing this week, the cotton market rallied into its Friday close. Bottom-pickers and short-sold buyers were the featured buyers. For all its decline, cotton remains in an overall uptrend. Also helping the market stabilize were the strengthening outside markets of grains and energies.
Friday afternoon, the CFTC will release its commitment of traders reports. If that data were to show certain speculators with less of a net-long position, then traders might assume there will be more room for additional buyers.
Friday morning’s unemployment report revealed an outstanding jump in new non-farm jobs of 379,000. The data resulted in an increase in higher interest rates, which in turn drove the dollar higher. Still, as states open up and more vaccines are given, the U.S. economy recovery may really accelerate. Interestingly, prior to COVID-19, interest rates were 2%, so it would seem logical current rates now return to that level again.
Next Tuesday USDA will issue its March crop report. Generally speaking, traders are anticipating lower domestic and global stocks.
May Cotton ended down 1.07 cents for the week and for the month, and up 7.82 cents for the year.
Friday, May Cotton closed at 87.76 cents, up 0.62 cent, July settled at 88.67 cents, up 0.54 cent and December cotton ended at 84.54 cents, up 0.54 cent; estimated volume was 36,802 contracts.