By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market ended Wednesday materially higher, as harsh hot-and-dry weather conditions persist. In addition, traders are anticipating a positive weekly exports-sales Thursday. To the former, the six- to 10-day and eight- to 14-day forecast hold triple-digit temperatures and virtually nil chances for rain. Given that the Texas crop is already rated 36% very poor to poor, by next Monday, its condition is expected to indicate a worsening situation.

To the latter concern, for some time China has dominated the U.S. buying schedule. In fact, last week, it bought all the new crop sales of 247,000 bales. Yet, with COVID-19 crippling global demand, it’s thought at some point China will stop buying cotton for its strategic reserve and perhaps even cancel certain outstanding purchases.

Still, the technical trend of the market is higher. Besides having most moving averages pointing bullish, the Market has recently surpassed its 50% retracement (from the January high to the April low). However, Wednesday, the new crop market hurdled the 62% retracement level. Such strong price action will only encourage certain technical traders to buy the futures.

July Cotton closed at 64.66 cents, up 1.42 cents, December ended at 64.16 cents, up 1.14 cents and March finished at 64.69 cents, up 0.93 cent. Estimated volume was 22,396 contracts traded.