The cotton market traded triple-digits higher overnight, only to retreat to slightly higher levels Monday morning. Traders see a strong U.S. dollar as a meaningful negative, and there is a supply-demand update this Wednesday as well.
The CFTC released its Commitments of Traders data Friday and the news was supportive to the markets. The report indicated the managed-money funds were net buyers of some 5,400 contracts of cotton. Their buying swelled their net-long position to slightly above 80,277 contracts.
As mentioned, USDA will issue its monthly crop data for December. Traders are looking for a slight increase in domestic ending stocks but are anticipating lower world carry. The report will be published at noon EST Wednesday, Jan. 12. Also, this week USDA will issue its Weekly Export Sales and Shipments (WESS) report Thursday.
For Monday, close-in support for March cotton is 115.00 cents and 114.40 cents, while resistance stands at 116.90 cents and 117.70 cents. The estimated morning volume is 5,661 contracts.