By Keith Brown DTN Cotton Correspondent
The cotton market found “reverse gear” Monday and staged a huge first-of-the-month rally. Although prices finished some hundred points higher, the futures had to initially rally over two hundred off their lows to achieve that price level.
Additionally, the market remains in an oversold condition due to its 1200-point spill. That massive break commenced at Easter and spanned the entire of the month of May.
Traders will be keen on seeing the planting progress numbers at 4 p.m. Monday. There have been reports the planting of the 2019 Crop has come to a halt in certain areas of the cotton belt. Overly wet conditions still prevail in the Delta, while massively dry conditions are melting the Southeast and Middle Atlantic areas.
The U.S. dollar was lower Monday as some analysts are suggesting the Federal Reserve may soon have to lower interest rates. The rationale for this outlook revolves around the idea that the U.S. economy has suffered some damage in the trade war with China.
For Tuesday, already some traders have mentioned the possibility of a turnaround Tuesday event. This thought-to-be-reliable indicator has a history of causing the market to trade on any given Tuesday opposite of its trading behavior on Monday. Thus with Monday’s higher close, a bearish reaction come Tuesday would not surprise certain traders.
For Monday, July cotton settled at 69.42 cents, up 1.34 cent. December finished at 67.97 cents, up 0.90 cent and March closed at 68.67 cents, up 0.93 cent. Monday’s estimated volume was 57,855 contracts.
