By Keith Brown, DTN Contributing Cotton Analyst 

After an early beatdown of nearly 100 points, the cotton market was able to reverse its course and end Monday with a higher close. Initially, the market dropped as all the weekend political news sent the Dow Jones markedly lower, spooking bullish cotton traders to the sidelines. However, as the trade began to focus on Tuesday’s supply-demand report, buyers reappeared, and thus the ICE futures’ higher settlement.

Traders anticipate a reduction in the 2020 crop in Tuesday’s USDA report. The December data had production at 15.95 million bales versus the average guess for Tuesday of 15.66 million bales. Of course, a cut to the crop should lower domestic carryout as well.

The U.S. dollar was higher Monday in more of a technical than a fundamental move. The dollar has been in a steep bearish decline for some time and may have become too oversold. So, commencing on Friday, currency traders began to buy in their short positions. Fundamentally, dollar traders do fear higher tax rates and massive amounts of new government stimulus, all of which devalue the greenback.

This Week’s Calendar:

Tuesday: USDA WASDE, 12 p.m. CST

Thursday: Weekly Exports/Sales at 7:30 a.m. CST

Friday: Retail Sales at 7:30 a.m. CST

Monday, March Cotton closed at 80.43 cents, up .66 cent; July settled at 81.86 cents, up .61 cent; and December cotton ended at 76.60 cents, up .41 cent. Monday’s estimated volume was 38,292 contracts.