After a good week of harvest weather, December cotton closed at its lowest prices in two months on Friday. Grains and metals were also lower, while livestock and energies ended higher.

General Comments:

December cotton closed down 0.43 at 66.88 while March was down 0.24 at 66.77. December corn finished down 4 1/2 cents while November soybeans were down 7 3/4 cents and December Chicago wheat was down 6 3/4 cents. The December U.S. dollar index is up 0.48 at 93.60.

December gold is down $9.30 at $1,280.70 while December silver is down $0.21 and December copper is down 0.0020. The Dow Jones Industrial Average is up 147 at 23,310. December crude oil is up $0.21 at $51.72. December heating oil is up $0.253, December RBOB gasoline is up $0.0251, and December natural gas is up $0.026.

Comments:

December cotton closed down 0.43 at 66.88 on a quiet day of trading with mostly dry weather and pleasant fall temperatures across the southern U.S., allowing for one more day of unimpeded harvest progress. Rains are expected in the Delta on Saturday and will work eastward to the Atlantic coast the following three days.

In spite of fall damage from Hurricanes Harvey and Irma, USDA still expects 21.1 million bales of production to lift ending U.S. cotton supplies from 2.75 to 5.8 million bales in 2017-18, a bearish fundamental influence for prices. Friday’s close put December cotton at a new two-month low and the 2017 low is not far away at 66.15.

The danger to this market is that noncommercials added to net longs when hurricanes were a threat and are still holding 54,660 contracts net long as of Oct. 10 (to be updated later Friday). With December cotton trending lower and challenging new lows, the pressure is on noncommercials to liquidate more positions, adding to the bearish dynamic.

Certified ICE cotton stocks were down 591 bales as of Oct. 19 to 2,995. The Cotlook ‘A’ Index was unchanged at 77.85.