By Keith Brown, DTN Contributing Cotton Analyst 

After two positive days — one with massive volume — the cotton market sputtered to a slightly higher close Wednesday. Overall, the market lacked any sort of follow-through enthusiasm, as selling emerged from producer fixation order, as well as some bit of selling from speculators. In total, money managed funds remain net short, just not as deeply held as they once were. To that point, bearish traders have moved from a high of over 49,000-plus contracts short last April to their current estimated position of 6,800 contracts short.

Thursday, USDA will issue its export sales. Given sales have been running very superior to the government’s original target, as well as the five-year sales average, traders fear China could, at any moment, cancel substantial purchases. This might be especially true as the U.S.-China revelations deteriorates over Wuhan, trade and Hong Kong.

Traders continue to watch the weather conditions over West Texas. Officially, that area, and its panhandle, have reached drought classification. Subscribers might recall it was a major Texas drought in 2018 that caused prices zoom to the 94.00-cent level. However, the surprise implementation of tariffs on China topped that market. Since that time, the cotton market has suffered below the 50-cent level as the coronavirus shuttered the U.S. economy.

For Wednesday, July cotton closed at 60.48 cents, up 0.11 cent, December finished at 59.73 cents, up 0.23 cent and March settled at 60.38 cents, up 0.43 cent. Estimated volume was 26,665 contracts.