By Keith Brown, DTN Contributing Cotton Analyst 

Cotton ended its first session of 2021 posting life-of-contract highs, but the volatility of the Dow Jones did scare several markets off their Sunday night perches. At one time the Dow was up some 200 points, but then fell to negative 700 points on the day as it fretted over the Georgia Senate run-off election. Its vicious spill eventually pulled the grains from their lofty levels, as well as the energies, and to some degree, the cotton market. Still cotton finished with triple-digit gains, with the July contract settling above the 80-cent mark.

The focus of traders and investors Tuesday will be the Georgia Senate runoff. A well-known Wall Street firm has already suggested to its clients if the Democrats win, meaning the U.S. has one party-rule, the Dow Jones could see a 10% downside correction. That would possibly be a 3,000-point decline. If that event occurred, it would be hard for many markets not to sell off.

The hope of the cotton market for 2021 is to see a continuance of its strong pace of exports. In the last four weeks of 2020 raw sales have tallied over 1.40 million bales. Such activity is reducing U.S. carryout, but still not from historical levels. Although, domestic ending stocks are currently projected at 5.70 million bales, off from its previous 7.25 million bales for last season, the immediate number remains the second highest since 2008-09. Of course, as the 2021 calendar progresses, USDA may see the need to lower carryout.

For Monday, March cotton closed at 78.97 cents, up 0.85 cent, July settled at 80.22 cents, up 1.05 cents and December cotton ended at 75.41 cents, up 0.54 cent; estimated volume was 40,268 contracts.