By Keith Brown DTN Cotton Correspondent
The cotton market finished sharply higher as buying flooded in from all trading quarters. That is, speculators, long-hedges, and textile mill type buying was very evident in today’s trade.
Of course, there was also short-covering from those traders who unwisely sold into Tuesday’s big spill. Wednesday’s volume was a massive 59,093 contracts, greater that the volume seen in Thursday’s sell-off.
Most likely traders keyed their buying on the bullish trend of the market, the fact the 2020 crop has yet to be planted, and the potential for strong sales come Friday.
USDA will release its weekly exports-sales, delayed by the MLK Holiday, Friday morning at 8:30 a.m. In fact, under the phase one trade deal, as well as the USMCA, going forward, new cotton sales could happen any day.
As it is, cotton sales for the 2019-20 season are running ahead of USDA’s projections, and well as the five-year average for sales this time of year.
Helping out Wednesday’s cotton rally were the all-time highs posted by the S&P 500 index, and well as the NASDAQ. Additionally overnight, Chinese authorities went to great lengths to control and hopefully contain the Corona-virus. Their efforts gave big sigh of relief to the various stock markets, which then spilled over into the commodities pits.
For Wednesday, March cotton at 71.13 cents, up 189, July finished at 7274, up 147, and December ended at 7205, plus 115 points.