The cotton market formed a reversal pattern of sorts Monday by violating the May monthly close and then closing higher on the day. Earlier in the session, the market sustained a deep break which carried new crop December cotton into life-of-contract low territory.

However, better news on the Mexican tariffs, as well as short-covering ahead of Monday’s crop progress/condition reports and Tuesday’s supply-demand data, rebounded prices. Volume Monday was huge at 73,700 contracts, which was only second to that of February 11.

As mentioned, 4 p.m. Monday, USDA will release its latest planting progress and crop condition information. For now, it is the condition of the crop that is being more keenly watched. There are several pockets of trouble spots across the Corn Belt. Just about every production major area has experienced some sort of adverse weather.

To that end, one can say the 2019 crop is not firmly established and that its potential yields are certainly questionable. Moreover, we continue to hear of growing production troubles unfolding India and China as well.

Tuesday’s supply-demand report at noon is expected to show a steady-to-larger domestic crop, with reduced exports, resulting in higher carryout. However, USDA’s actual planted acres report is not out until the last business day of June, and that will be the benchmark number traders will use for forecasting.

For Monday, July cotton closed at 65.99 cents, up 0.40 cent, December finished at 65.57 cents, up 0.06 cent and March ended at 66.41 cents, up 0.27 cent.