After seesawing over Tuesday’s strong settlement, cotton did close in positive territory. A rebounding Dow Jones and positive Chicago grains peripherally helped the market stay its bullish course. To that end, the cotton market would very much like to see strong numbers out of Thursday’s weekly export sales. Of late, new-crop sales (2021-22) have been running below prior year sales, as well as the five-year average.
Traders are paying close attention to India’s monsoonal season. The monsoons started off very strong and the average rainfall exceeded 40% of what’s normal until June 19. Currently, it is stalled and hasn’t progressed into much of the northwest part of the country.
July and August are the rainiest months in the monsoon season, and true to form there has been some recent flooding in and around New Delhi. The rainfall in July contributes to about 35% of the season’s outpour and thus, is crucial for agriculture and reservoir replenishment.
The U.S. dollar appears to be losing some of its bullish steam. Back in June, when the Federal Reserve surprisingly took a more hawkish stance on interest rates, the greenback sharply rallied, nearly reaching its March high of 93.43 points. However, in the context of the rally, the U.S. Dollar Index has become overbought and some traders are selling to take profits.
Wednesday, December settled 88.69 cents, up 0.18 cent, March ended at 88.38 cents, up 0.30 cent and December 2022 ended at 79.99 cents, up 0.23 cent; estimated volume was 15,413 contracts.