By Keith Brown, DTN Contributing Cotton Analyst
The cotton market was lower Wednesday, still smarting from USDA’s surprise yield increase, but also from the directional change for now Hurricane Eta. On Monday, most weather charts seem to be in agreement that Eta would land and spill out over the Southeast, thereby delaying harvesting efforts. However, with its landfall is looking to be a tad north of Tampa, southeastern farmers are breathing a sigh of relief.
The market is anticipating Friday’s option expiration for the December contract and the delayed export-sales data. The latter report was pushed back to Friday due to the observance of Veteran’s Day. Last week’s sales were 116,000 bales, with China and Pakistan as top buyers.
The U.S. dollar and the Dow Jones were higher Wednesday, still running on the fumes of a COVID-19 vaccine possibility. On Monday, Pfizer announced robust trials results from its tests which spiked the Dow some 1,700 points higher and rallied the dollar from near contract lows. The hope is America and the world are closer to a better level of normal.
The ICE cotton futures showed a massive volume count of 85,000 contracts Tuesday. This was attributable to traders rolling over their positions from the front December to the March contract, as well as the deferred May and July futures. Wednesday’s volume of 60,000-plus is indicative aggressive rolling is occurring among merchants and funds.
December cotton closed at 69.28 cents, down 0.57 cent, March settled at 71.38 cents, down 0.27 cent and December 2021 finished at 69.94 cents, down 0.31 cent. Estimated volume was 60,966 contracts.