By Keith Brown, DTN Contributing Cotton Analyst
The cotton market shot sharply higher Monday morning as traders gave Hurricane Delta its due. Then, as the session wore on, other traders began to book some profits, especially in the face of declining beans, corn and wheat markets. Their selling action did push spot December off its 69-cent horse, yet legitimate fundamental concerns remain as there was severe damage done to the Delta crop. Still, those crop losses may not officially surface till next Monday’s weekly crop progress report.
Chart-wise, the 70-cent mark is a huge psychological resistance level. That price was last seen in February, just before the COVID-19 scare plunged the market to a near 50-cent trade. However, managed-money speculators continue to keep a bid under the overall market, buoying prices. Currently, via their net long position, they hold the equivalent of 5.350 million bales of cotton via options and futures.
In observance of Columbus Day, the U.S. government, the Federal Reserve and U.S. banks were closed Monday. Thus Tuesday USDA will issue its weekly crop progress data. Last week the tabulations had the 2020 crop rated at 40% good to excellent, off from its previous 43% good to excellent. Next, it said 17% of the crop was harvested compared to the five-year average of 20% and that 83% of bolls were open. It is the last number that obviously could cause the market more harm.
For Monday, December cotton closed at 68.37 cents, up 0.73 cent, March closed at 69.18 cents, up 0.76 cent and December 2021 finished at 67.38 cents, up 0.85 cent. Estimated volume was 35,955 contracts.