By Keith Brown DTN Cotton Correspondent
The cotton market closed moderately higher Wednesday, as traders anticipate a positive sales and exports numbers Thursday. Last week saw a combined crop year sales of 183,000 bales, but given the potential for Chinese buying via the U.S.-China trade deal, other nations may feel pressure to increase their buyers. Thus, a strong number Thursday is a likely event.
Technically, the spot market continues to seesaw over the 200-day moving average. This mathematical indicator is highly regarded and employed by long-term trend-following traders. To that end, certain money-managed speculators are close to being neutral in their position, thus a definitive close above the 200-average may inspire such traders to move to a net long position.
A new current of bullishness seems to be taking root within the market. That “blowing wind” began to emerge within the last few supply-demand reports. Within that data, the U.S. 2019 crop has been cut some 1.50 million bales, along with reduced domestic and global carryout. Additionally, foreign production has been dramatically pared as well. Those reductions hit China, India and Pakistan.
To date, U.S. export sales and shipments are ahead of the five-year average. Additionally, U.S. sales remain the second highest on record and are 16% ahead of the prior year’s pace. Wednesday, March cotton closed at 66.74 cents, up 0.30 cent, July ended at 68.66 cents, up 0.12 cent and December 2020 finished at 68.72 cents, up 0.13 cent. Estimated volume was 21,779 contracts.