December Cotton ran up and down the price ladder Monday, within a daily high/low range session of 200 points. However, in the end, the market closed a mere 6 points down. Early in the session, the market collapsed to its low of 7537 as continued speculator liquidation took its toll. However, then came the news of a U.S./Canadian trade agreement, and that event sent prices well above the 7700 level.
Of course, the big reversal was helped out by the fact the market was already hugely oversold from the last two weeks’ decline. Thus, a sort of vacuum was created and prices boomed higher. Yet, when the euphoria died down, the market returned to the reality of the U.S./China trade war, and the knowledge that a big harvest was forthcoming.
Monday’s volume was a stunning 48,000 contract traded. It will be interesting to see what effect it had on open interest.
Next week, USDA will issue its monthly supply-demand report. In that data, traders will have a better handle on the scope and size of the 2018 crop.
December cotton settled Monday at 7631, down 6 points, March was 7705, minus 24, and December 19 cotton was 7590, up 13 points.