DTN Cotton Close: Market Edges Higher

DTN Cotton Close: Market Edges Higher

By Keith Brown DTN Cotton Correspondent 

Despite its earlier morning strength, the cotton market finished the session only slightly higher. There were hopes that turnaround Tuesday would have been a more bullish event, but the market can only ride so far on the potential for U.S.-China trade optimism. At last, there has been positive comments from both sides suggesting definite progress is being made. In fact, President Trump has indicated his expectation of signing the phase one portion as part of the overall comprehensive trade deal in November.

Technically, December cotton is approaching its 200-day moving average, which comes in around the 68.00-cent level. A close over than level ought to really encourage the short-sold speculators to reduce their bearish holdings all the more. Currently, the latest government data indicate speculators are net short some 11,000 contracts, a position that is way less than their net sort position of 49,000-plus contracts this past summer.

The market is looking towards this week’s weekly sales and exports report. The last two weeks have shown decent sales to mainstay customers other than China. Even if China doesn’t buy new purchases, Traders are hoping it will at least stop canceling its previous U.S. purchases. Currently, U.S. seasonal sales are running such a strong pace, well ahead of USDA’s original seasonal projection and it’s above its five-year average.

Tuesday December cotton settled at 64.67 cents, up 0.11 cent, March ended at 65.42 cents, up 0.08 cent and December 2020 closed at 66.72 cents, up 0.04 cent. Estimated volume was 30,894 contracts.


Source: Agfax
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