December cotton finally found bullish footing on Friday, despite another early plunge in the Dow Jones. The Dow fell some 400 points but held key support and staged a comeback of sorts. Its turnaround inspired cotton to trade up. However, we also think cotton finished higher Friday as reports of deepening crop losses are still emerging.
Reports from insurance adjusters suggest there will be wholesale wipe-outs of Georgia cotton farms. Thus, with next week starting the month of November, thoughts are rapidly turning towards USDA’s supply-demand report mid-month. Unofficially, many believe the current U.S. crop is overstated by 1 million bales.
For the week, December cotton closed up 0.61 cent, on the biggest weekly volume in months. Although Friday’s daily estimated volume was 25,200, the average volume for the week is closer to 38,000 contracts.
Key reports to watch next week will be Monday’s crop condition/crop harvest, Tuesday’s consumer confidence, and Thursday’s weekly sales and exports, and Friday’s all-important jobs data.
December cotton settled today at 78.53 cents, up 0.85 cent, March was 79.82 cents, up 0.86 cent and red December was 77.33 cents, up 0.26 cent.
