By Keith Brown, DTN Contributing Cotton Analyst
The cotton market was slightly higher Wednesday, albeit on low volume. In fact, Wednesday’s range basis December cotton was less than 1 cent. For much of the month of July, the market has been trading sideways as traders try to digest conflicting information. That is, much of the weather this summer has been hot and dry in key producing areas, which was considered friendly to price, but contrasted to demand concerns involving a lag between sales and actual shipments. Thursday, USDA will issue its latest export sales data, which should provide some light on the demand topic. Additionally, Friday marks the end of the 2019-20 season.
As expected, the Federal Reserve interest rates unchanged at .25%. However, the Fed statement went on to say the economy will suffer from COVID-19 for some time.
Of course, an emerging concern of the market includes the crop damage done to the valley crop by Hurricane Hanna. Just now some assessments are being conducted and early accounts indicated significant damage. Also, the U.S. dollar took another steep tumble Wednesday, as investors sold into weakness. Given the political polls indicate a Biden victory, as well as the current civil unrest, tremendous downside pressure is being put on the greenback.
December cotton closed at 61.61 cents, up 0.50 cent, March ended at 62.32 cents, up 0.49 cent and December 2021 settled at 62.21 cents, up 0.51 cent. Estimated volume was 12,656 contracts.