The market is way up Wednesday as traders see its bullish trend becoming reinvigorated. Tuesday, in holding key technical resistance, the market also resisted the temptation to trade sympathetically lower with the Chicago grains. To that end, a couple of noteworthy fundamentals to keep in mind are the weather and the dollar.
Weather-wise, additional rains are expected in the U.S. Delta which is raising concerns about flooding. That immediate forecast does call for some heavy rains in northern Texas, Oklahoma, and the northern Delta. However, the midterm 6-to-10, and the longer-term 8-to-14 day forecasts collectively call for below normal temperatures and above normal precipitation across Texas, the Delta and the Southeast.
The U.S. dollar is lower Wednesday after congressional comments from Fed Chair Powell yesterday. Essentially he said although the Fed is closely watching all inflation indicators, the central bank will use great discretion before hiking interest rates.
Thursday at 8:30 a.m., USDA will issue its weekly export sales data. With the 2020/2021 season coming to a rapid end, traders are keen to see the current sales pace continue to outrun USDA’s target.
Also Thursday, spot July enters its notice period. The final day for the old crop contract is July 8.
For Wednesday, close-in support for December cotton is 84.10 cents and 83.40 cents, while resistance stands at 87.15 cents and 88.50 cents. The estimated morning volume is 7,025 contracts.