DTN Cotton Close: Market Follows Grain Trade

The cotton market was sharply lower Monday morning, then slightly higher towards the afternoon, as it mimicked the trading action of the Chicago grains. Thus, until other straightforward cotton information emerges, such may be the flow of the market for now.

Of course, the most highly anticipated news will be the June 30 acres data. It is expected USDA will report a big reduction in the 2021 plantings. However, prior to that number, the market will trade its usual crop condition and exports-sales reports.

Monday afternoon, CFTC will issue its delayed Commitment of Traders report. It is expected the managed-money speculators have slightly increased their net long position.

At the same time Monday, USDA will update its latest crop progress/crop condition for the 2021 crop. By now, the 2021 crop will be fully planted, however, recent adverse weather events unfolding across the Belt, from California to Texas to Georgia may have set the crop back.

The one- to five-day forecast calls for moderate to heavy rainfall from central Texas to the Atlantic Coast. However, the forecast for West Texas indicates little to no rain and with above average temperatures.

Spot July cotton enters its notice period this Thursday. To avoid delivery, all participants must exit the market by Wednesday’s close.

For Monday, July closed at 84.09 cents, down 0.33 cent, December settled at 85.19 cents, up 0.01 cent and March 2022 ended at 85.08 cents, 0.02 cent higher; estimated volume was 22,435 contracts.

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