The cotton market is meekly trading both sides of Monday’s settlement. Traders have one eye on the Chicago Grains and outside markets and the other on the lookout for specific cotton information.
To the latter, USDA issued its weekly crop condition report Monday afternoon. Its numbers currently indicate the nation’s crop at 52% good/excellent, versus last week’s level of 45%. The ten-year average is 47%. Specifically, Texas was 35% good/excellent versus the previous 28%. The state’s ten-year average is 35%. Mississippi was 56% good/excellent down from 61% the previous week, 66% a year ago.
The CFTC’s Commitments of Traders data showed managed money traders were net buyers of 4,740 contracts of cotton for the week ending June 15. That activity increased their net long to 42,685 contracts.
The immediate weather forecast (1-5 day) calls for moderate to heavy rains across the Delta and Southeast, with little rain for West Texas. Additionally, the 6-10 and 8-14 day outlooks indicate below normal temperatures and above normal precipitation from central Texas across the Delta and into the Southeast. During that time, conditions are expected to be drier for West Texas.
Federal Reserve Chairman Jerome Powell will testify before Congress Tuesday. He will likely be grilled on the Fed slant towards a more hawkish monetary policy.
For Tuesday, close-in support for December cotton is 84.00 cents and 83.40 cents, while resistance stands at 85.70 cents and 87.10 cents. The estimated morning volume is 10,167 contracts.