The cotton market is slightly higher Tuesday despite improvement in the condition of the crop. Monday afternoon, USDA projected the crop at 64% good/excellent, up from the previous reading of 61%. The good/excellent ratings for the top producing states were: Texas 58%(+4%), Georgia 69% (+5%), Mississippi 70% (-1%) and Alabama 83% (+2%).
Tuesday’s CPI number showed “slowing” inflation, coming in less than expected. It jumped some 0.3% month-to-month, or 5.3% from a year earlier, below the 0.4% increase and 5.4% annual gain. Tuesday’s data comes after an increase of 8.3% last month which was the largest annual increase on record.
Looking ahead, traders are anticipating another positive weekly export sales this Thursday. Last week saw an impressive number of 250,000 plus or minus bales sold, with China as the top buyer. However, there is a growing worry over the emerging shipping crisis. As noted Monday, freight rates are fast becoming exorbitant, and space is hard to book.
For Tuesday, close-in support for December cotton is 92.60 cents and 92.00, while resistance stands at 94.10 and 94.85. The estimated morning volume is 4,965 contracts.