By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market posted another high, and then promptly fell negative on the day. However, emerging speculative buying brought the market back and finally closed slightly higher on the day. Interestingly, Wednesday’s market came within 0.75 cent of its January/phase-one high of 73.00 cent. Several analysts believe the market will hurdle that high ahead of this weekend.

Thursday, USDA will issue its weekly export sales. With a weaker U.S. dollar over the past two weeks, some traders are anticipating stout sales and shipment amounts. The dollar should continue to weaken if another stimulus bill is passed.

Technically, the cotton market has reached overbought status. Any general chart indicator, such as the RSI or stochastic indicator, is depicting this condition. Simply stated, overbought means the market has gone up too fast too quick with little correction. Still, even as the market reads overbought, that assignment is no automatic signal to sell short. In fact, some traders see it as a reason to buy. Thus, some of the renewed buying seen Wednesday may have been top pickers being forced to re-buy their short-sold positions. At last count, manage-money spectators were heavily long the market.

For Wednesday, December cotton closed at 71.04 cents, up 0.02 cent, March settled at 71.73 cents, up 0.03 cent and December 2021 finished at 70.51 cents, down 0.06 cent. Estimated volume was 32,398 contracts.