The cotton market ended sharply higher Thursday amid a mix of strong sales and renewed hopes for improved talks between the U.S. and China. Spot December posted a new contract high close Thursday, and now stands some 700 points from $1.20 cotton.

However, there was a negative side to Thursday’s trade. Third quarter GDP showed a dismal 2% growth rate, the lowest pace since 2018, and cotton exports for last week came in at a marketing year low of 63,000 bales shipped.

The weaker GDP number did cause a small sell-off in the U.S. dollar Thursday. The rationale for that retreat centers on the notion that a weaker economy discourages the Federal Reserve from hiking rates. On the table for next month is whether the Fed will initiate its tapering process.

Friday afternoon the CFTC will issue its most recent trader information. Last week, the managed-money funds pared their net long position down to 84,000 or so contracts from a peak of nearly 96,000.

However, cotton’s latest upward surge most likely has encouraged those traders to wade back in the long side of the market. Unfortunately, the shut-off for compiling that data is the close of each Tuesday, so there is always a lag on that specific information.

For Thursday, December settled at 113.73 cents up 3.21 cents, March ended at 111.83 cents plus 3.19 cents, and Red December (2022) ended at 91.72 cents, 1.10 cents higher. Thursday’s estimated volume was 48,575 contracts.