By Keith Brown DTN Cotton Correspondent
The cotton market nearly fell out of control Tuesday by posting early triple-digit losses. As we like to say a bull market needs a daily dose of bullish information to trade higher, just as a real bull needs to eat daily rations to survive.
There was virtually no friendly news out Tuesday. The planting pace, per USDA’s progress data, appeared normal, there is no actual trade deal to be announced and the recent winter rally had the market in an overbought situation. Thus, the sellers came in on Tuesday.
Yet, by the close the losses were pared, and another positive was the volume seem to increase on the intra-day recovery. Tuesday’s estimated volume was 36,300 contracts.
To proceed higher, the market needs to see a benign delivery period basis the May contract, and secondly, a stout exports-sales report on Thursday.
Weather-wise, the 6 to 10-day forecast has above normal temperatures for the entire Cotton Belt, with below normal rainfall for central Texas into the Delta. West Texas ought to see above normal rainfall during this period. USDA will issue another planting progress report this coming Monday.
Tuesday May cotton settled at 76.57 cents, down 0.62 cent, July finished at 77.91 cents, minus 0.56 cent and December closed at 76.85 cents, off 0.37 cent.
