December cotton was slightly lower on Thursday amid a noticeable swing in contract volume. Interestingly, December’s estimated volume on Thursday was 12,600, but March’s estimated volume was 21,700 contracts. Apparently, some sort of roll is now occurring. To that end, December cotton does commence its first notice day, the day delivery notices are issued, on Monday, November 26.
That means all traders wishing to avoid the delivery process must vacate their long December positions on the preceding Friday, November 23, the day after Thanksgiving. A twist may be that Friday will see an abbreviated trading session, so next Wednesday may be the big exit day.
Thursday, USDA will issue its weekly sales and exports report in the morning. In recent weeks, those sales have been bearish as China has been on a tear of cancelling current season purchases but buying physical cotton out in the 2019-20 season. Of course, we think they are under no obligation to take those new crop purchases. Those are intended, more or less, to be a hedge of sorts. Anyway, that data comes out at 8:30 a.m. eastern.
December cotton settled Thursday at 76.25 cents, down 0.14 cent, March was 78.28 cents, down 0.07 cent and December 2019 was 77.30 cents, off 0.20 cent. Total estimated volume was 37,800 contracts trade.
