The cotton market was sharply lower Monday on the beneficial weather forecast for the Texas crop. Essentially, that forecast calls for Texas to get rain where it needs it, and warming temperatures where it needed those as well.

The warming temperatures should greatly help in the development of the crop. Thus, despite fewer 2019 acres (per USDA’s planted acres data of June 30), with improving weather conditions, plus better seed enhancements, a larger yield can still result from fewer fields.

Technically, the market posted its third lowest close within the past thirty-seven trading sessions. Yet, somehow the record short speculators will need to feel they are wrongly positioned, but given Monday’s poor price action, they “are not feeling the burn”.

Tuesday, spot July cotton will expire. While most market participants have old crop contracts in their rear-view mirror, it can still have an influential effect on new crop. That is, a final switch-of contact gap could cause new crop October to trade down to where spot July dies.

Monday afternoon, USDA will release its latest crop condition numbers. Last week saw the 2019 crop rated 52% good-to-excellent.

For Monday, July cotton closed at 62.33 cents, off 1.11 cents, December settled at 65.64 cents, down 1.18 cents and March 2020 cotton ended at 66.70 cents, down 1.12 cents. Volume was at 25,076 contracts.