DTN Cotton Open: Market Rebounds Overnight

    Tractors preparing to add cotton modules tp a long row. ©Debra L Ferguson

    The cotton market is higher Friday morning with short-covering and bargain-buying from traders. From Friday one week ago, cotton imploded some 1300 points when the panic over the new omicron variant reached fever pitch. That new COVID twist upended the financial and energy markets, which in turn forced cotton and the Chicago grains markedly lower. However, this Friday, it seems the proverbial tables are somewhat turning.

    There were eight deliveries tendered against spot December overnight. The issuer was ADMIS, while the stopper was SG Americas. To date there have been a total of ten notices issued. December Cotton expires on December 8.

    The Labor Department reported less-than-expected job creation for November. Expectations were calling for some 550,000 new non-farm jobs, but the reported amount was a mere 210,000. Interestingly, the unemployment rate fell to 4.2%.

    From Thursday’s USDA weekly export sales data, we note that cumulative sales for 2021/22 have reached 9.345 million bales. Although that number is below the year ago pace, it is above the five-year average. Sales have reached 63.8% of the USDA’s forecast for the marketing year versus a five-year average of 65.0%.

    For Friday, close-in support for March cotton is 102.50 cents and 102.00 cents, while resistance stands at 106.70 cents and 108.44 cents. The estimated morning volume is 5,790 contracts.

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