December cotton traded sharply higher Wednesday as expectations for a decisive cut in the 2018 Crop induced strong buying. Traders are anticipating USDA will translate the many and varied weather woes of the 2018 season into a smaller crop. Those troubles include droughts, freezes, excessive rains and hurricanes.
Wednesday’s estimated volume was greater than 50,000 contracts. Yet, despite the huge up day, the market halted just south of its early November high of 79.78 cents, as well as the late October of 80.14 cents.
Another positive fundamental for cotton Wednesday was the steep break of the U.S. Dollar. Of course, the break of the greenback was the result of the Democrats winning the House. It is thought that a divided government may halt the pro-growth policies of the President’s administration, thus the dollar retreated.
Also Thursday, USDA will issue its latest sales and exports data. In recent weeks those numbers have been dismal. In fact, there have been several consecutive weeks of marketing-year-low returns, with China as a noted canceler.
December cotton settled at 78.96 cents, up 1.53 cents, March closed 80.57 cents, up 1.30 cents, and December 2019 settled 78.25 cents, up 0.41 cent.
