After trading in negative territory for most of its session, the cotton market staged a late day rally. That comeback helped to minimize spot July’s losses, but actually pushed new crop December into positive levels. Of course, with so many cotton events about to unfold, it is understandable certain traders and funds would want to square up some holdings. Thus, Wednesday’s knee-jerk action.
Starting Thursday and into the weekend, the series of cotton events include Thursday’s weekly export sales and the monthly supply-demand numbers. Then, on Friday, options on the July contract will expire.
The Federal Reserve said Wednesday it will keep interest rates near zero into 2022. In addition to that announcement, the central bank also said it will continue to increase its bond holdings to preserve the flow of credit. Currently, according to the FDIC, the average savings account rate in the U.S. stands at a mere 0.06% or even less at some of the largest retail banks. Post report, gold and silver rallied, while the U.S. dollar sharply fell.
July Cotton closed at 60.51 cents, down 0.01 cent, December ended at 60.32 cents, up 0.30 cent and March closed at 60.91 cents, up 0.21 cent. Estimated volume was 39,026 contracts.