In a post-Christmas move, the cotton market reversed course Wednesday as the Dow Jones posted a super-sharp rally. Also in the mix was crude oil recovering nearly $4 per barrel. Simply put, the Christmas Eve massacre was overkill for many markets and thus Wednesday bargain hunters and short-covering ruled the day.
For cotton too, after dropping 1,000 points since Dec. 3, and after falling for six consecutive days, it was time for a recovery. Still, one day up does not a bull market make. But, it is better than another lower close.
The market needs a dose of real positive news to encourage it even higher. Its first chance will be this Friday when USDA will report on weekly sales and exports data. Hopefully, this price decline uncovered some new business. Naturally, a trade deal with China would go a long way towards relieving the market’s anxieties. Yet, such might not come until the January/February time period.
March cotton settled at 7350, up 95; July was 7578, up 74; and December was 7380, up 27.