By Keith Brown, DTN Contributing Cotton Analyst
The cotton market ended Thursday moderately higher as speculators and hedgers bought into the declining new crop.
The cotton market ended Thursday moderately higher as speculators and hedgers bought into the declining new crop. Just last week, December Cotton had posted a new high for its move, closing some 14.50 cents off its April lows. However, the latest price surge did send the market into an overbought situation. Thus, from Monday till Thursday, different traders sold into the market lower for different reasons. It was also interesting the market did recover Thursday in spite of bearish exports sales.
The immediate and dominant fundamental for the markets remains the weather. Currently, Texas and other cotton producing areas are looking at forecasts that carry well above normal temperatures and well below opportunities for normal rainfall. Of course, mid-to-late summer is the crunch time for development of the crop. To that end, traders are expecting the Texas crop to sink further in USDA’s crop ratings data that will be released Monday afternoon. At last count, the Texas crop was rated 41% very poor to poor.
Coming into Friday, December cotton is down 1.77 cents on the week, up 1.66 cents for the month and down 7.82 cents on the year.
For Thursday, December cotton closed at 62.45 cents, up 0.41 cent, March finished at 63.19 cents, up 0.34 cent and December 2021 settled at 62.90 cents, 0.21 cent higher. Estimated volume was 10,512 contracts.