By Keith Brown, DTN Cotton Correspondent
The cotton market came off its worse weeks of trading in years to close materially higher Monday. One bullish driver for cotton was the strength of the Dow Jones. Last night that market traded down some 500 Dow points, but by cotton’s 2:15 p.m. close, it was up 700 or so points.
Another bullish driver was the collapse of U.S. dollar. In recent press conferences on coronavirus, President Trump had railed on the Federal Reserve for its interest rates policy and against the strength of the dollar. Of course, a weaker dollar is a bullish fundamental in that it encourages exports of U.S. commodities to foreign customers.
Friday’s Commitments of Traders data still showed speculator with a net long position, but only marginally so. Supposedly, last week they sold nearly 10,000 contracts, reducing their net long position to 22,400 contracts.
March cotton remains in delivery, which will run to March 9. There were zero deliveries Monday.
This Thursday, USDA will report on weekly exports-sales. It is thought foreign buyers took advantage of cotton’s knee-jerk bearish reaction to the Dow, and purchased more US Cotton.
May cotton closed at 63.38 cents, up 1.89 cents, July ended at 64.06 cents, up 1.79 cents and December settled at 64.30 cents, up 1.86 cents. Estimated volume 66,161 contracts.