Overnight the cotton market has posted triple-digit gains as it follows a recovering Dow Jones and a weaker U.S. dollar. Monday saw the Dow crumble nearly 600 points before commencing a strong come-back, and now overnight, has essentially recouped most of Monday’s losses. The tug of the Dow’s Monday negativity caused the cotton market to surrender most of its gains to settle slightly unchanged. Currently, cotton traders await Wednesday’s supply-demand update.
Wednesday at 12:00 p.m. EST, USDA will issue its January crop report, reflecting data for the month of December. For that report, the average trade estimate has U.S. ending stocks at 3.46 million bales, a slight increase from December’s 3.40 million. World ending stocks are estimated to be around 85.61 million bales, which is lower than the prior month’s amount of 85.73 million bales.
On Thursday, USDA will issue its weekly export sales report. Of primary concern will be the shipment category. The inability of the industry to promptly export cotton is the single most bearish fundamental that faces the market.
For Tuesday, close-in support for March cotton is 114.80 cents and 114.10 cents, while resistance stands at 116.70 cents and 117.70 cents. The estimated morning volume is 3,045 contracts.