DTN Cotton Closing: Markets Higher on Acres Buying
DTN Cotton Closing: Markets Higher on Acres Buying

DTN Cotton Closing: Markets Higher on Acres Buying

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By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market settled higher again Wednesday as speculators, hedgers and traders initiated new buying. The rally stemmed from the less-than-expected acres numbers USDA presented on Tuesday. The average guess prior to the report was 13.17 million, but the amount reported was 12.20 million. Of course, with top-producer, Texas, experiencing sweltering heat and dry conditions, the market is having high anxiety over what the 2020 production could ultimately be.

In its most recent June supply and demand report, USDA projected a U.S. crop of 19.50 million bales and a carry of 8.0 million bales. However, if current adverse weather conditions persist, then some analysts are indicating the 2020 crop could easily fall to 13.4 million bales and the carryout to 5.77 million. That crop would rival the 2016 season, when the market started low (54 cents), but shot up to a summer high of 78 cents.

Thursday, USDA will report its weekly sales and exports information at 8:30 am. At the same time, the Labor Department will announce its jobs report survey, moved up a day due to the observance of July 4. Expectations call for some three million new jobs to be created with an unemployment rate at 12.

Wednesday marks the beginning of the third quarter of 2020. To that point, the second quarter (April/May/June) saw December cotton up 9.10 cents, and for the month of June, new crop was up 3.87 cents.

July cotton settled at 62.58 cents, up 1.60 cents, December finished at 62.76 cents, up 1.88 cents and March ended at 63.45 cents, up 1.91 cents. Estimated volume was 35,897 contracts.


Source: Agfax

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