After posting its highest price in five weeks, the cotton market ended Monday moderately lower. Yet, Monday’s volume was quite low. In fact, at 14,753 contract, it was less than Friday’s 16,483 contracts.
To that end, some traders see a price decline on low volume as not so necessarily bearish. In fact, that situation is sometimes interpreted as the market is simply marking time to ease an overbought condition. Tuesday should prove interesting.
Monday afternoon, USDA will report on the planting progress of the 2020 crop. So far the planting pace falls in line with historical norms.
Of course, weekly export-sales reports are growing in importance, given the rising anticipations additional cancellations of U.S. cotton may occur. Recently, there have been several stories swirling about indicating China is preparing to began buying U.S. agriculture under its phase-one obligations. The purchase total is 30 million metric tons, with cotton absorbing 1 million metric tons.
For Monday, July cotton closed at 55.01 cents, down 0.62 cent, while December closed at 57.03 cents, down 0.64 cent.