The cotton market is lower Tuesday as it assesses the impact of spot December’s delivery and the growing strength of the dollar.
For Tuesday, there were zero deliveries placed against the December contract. There had been some brewing anticipation that a squeeze might unfold, given the delayed crop and tight certified stocks, but obviously as of Tuesday, that event is not occurring.
Monday afternoon USDA reported the current crop is 75% harvested. This compares to last week’s 65% gathered and is higher than the five-year average of 71% complete. Several Delta and Southeastern states are lagging in their harvesting effort.
The U.S. will release 50 million barrels of crude from the Strategic Petroleum Reserve Tuesday in a coordinated effort among certain energy-consuming nations. Besides the U.S., China, India, and Japan are taking part. The price of U.S. gasoline currently stands at a seven-year high.
For Tuesday, close-in support for March cotton is 115.00 cents and 114.50 cents, while resistance stands at 117.50 cents and 118.50 cents. The estimated morning volume is 4,560 contracts.