By Keith Brown, DTN Contributing Cotton Analyst
The cotton market posted a third day down as traders and speculators booked profits, as well as initiated outright short positions. Of late, the market has been bounding higher as the West Texas crop deals with a very grim weather situation. In short, Texas and several nearby states find themselves cloaked in official drought status. Extended forecasts still indicate hotter than normal temperatures and less than normal rainfall in their outlooks for that part of the cotton belt.
Thursday, USDA issues its export sales data. As the 2019-20 draws to a conclusion, it has been remarkable how stout business has been. To that end, even though China has been under the dark cloud of tariffs, it stands as the No. 2 buyer of U.S. cotton this season.
As the geopolitical situation between China and the U.S. sours, the U.S. dollar has been tumbling. Global currency traders see the ramp up of COVID-19 infections, as well as polling data indicating a democrat presidential lead as bearish for the U.S. dollar. It is generally thought a weaker dollar is highly beneficial to U.S. agriculture.
Wednesday, December cotton closed at 62.13 cents, down 0.50 cent, March finished at 62.85 cents, down 0.46 cent and December 2021 ended at 62.69 cents, down 0.51 cent. Estimated volume was 12,219 contracts.