By Keith Brown, DTN Contributing Cotton Analyst 

After posting new highs for the move, including fresh monthly highs, the cotton market finds itself in a self-correcting mode. Speculators, who have been buying the new crop futures based on the adverse weather of West Texas, were small sellers Tuesday. To that end, Tuesday’s estimated volume was a dismal 16,112 contracts traded.

Into Wednesday, traders will be keen on any weather updates, pro or con, as to their impact. As of now, the six- to 10-day and eight- to 14-day forecast continues to show hot-and-dry conditions for West Texas and surrounding areas. To that end, suddenly some fields across the Southeast are fast becoming dry. Despite recent afternoon showers a few or so days back, the recent 90-plus degree days have virtually sapped all the moisture. This new dryness is heightening concerns that insects, such as white flies, may emerge to adversely affect the southern crop.

The relationship between the U.S. and China continues to deteriorate. The Trump administration’s accusation that China deliberately fomented the coronavirus has greatly angered Beijing. Additionally, the Chinese are upset over American support of Hong Kong, as well as challenging China’s territorial claims to the South China Sea. For its part, China has come out and sanctioned two high profile U.S. senators. Of course, China continues to buy U.S. cotton in great amounts, suggesting it is willing to publicly criticize the U.S., while privately turning a blind economic eye.

December cotton settled at 62.63 cents, down 0.72 cent, March ended at 63.31 cents, down 0.73 cent and December 2021 finished at 63.20 cents, down 0.65 cent.