The cotton market finally closed above 90 cents Tuesday as speculators and end-users have been strong buyers of late. To the former, the latest CFTC data showed the managed-money funds as increasing their net long positions. To the latter, reportedly there is a massive amount of on-call sales yet to be fixed by textile mills.
Wednesday at 2 p.m. EDT, the Federal Reserve will announce any changes to its current monetary policy; no changes are expected. The Fed has bought some 80 billion dollars of U.S. debt to keep rates lows and the economy supported.
Thursday, USDA will issue its weekly export sales report. Last week saw old crop sales of 40,000 bales, new crop sales at 251,900 bales, and shipments of 246,100 bales. Thursday is also the end of the 2020/2021 season, so there is bound to be some rolling of sales and shipments into the new crop year.
Although the current demand tone has been positive, cumulative cotton sales are slightly lagging the pace to reach the current USDA estimate. Hopefully a weaker U.S. dollar, as well as inflationary pressures, will increase demand for US cotton.
For Wednesday, close-in support for December cotton is 89.00 cents and 88.50 cents, while resistance stands at 90.50 cents and 91.00 cents. The estimated morning volume is 10,567 contracts.