By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market was able to hold its big gains on Tuesday.

Typically, After a strong up day on Monday, the market has been known to retreat lower on Tuesday, but that was not the case. Thus, besides the market’s obvious upward sloping technical trend, traders are also factoring in adverse weather and field conditions unfolding across the production belt. Just Monday, USDA lowered its crop ratings for six out of the 10 top-producing cotton states. The current weather outlooks call for hot and dry weather for most of Calendar August.

The U.S. dollar was lower Tuesday as currency traders fear additional government stimulus to combat COVID-19 will dilute the power of the dollar. In response to its decline, spot gold shot above the $2,000 mark. Such market action reeks of emerging inflation.

On Thursday, USDA will issue its export sales. However, the difference for this week is that this will be the last export sales data for the 2019-20 season. Supposedly, there may be a huge shuffle in the old crop numbers as more cotton was sold to China than has been delivered. Traders hope to see those undelivered bales, at least a huge portion, rolled into the new 2020-21 season. If not, the market may see large cancellations by China.

December cotton closed at 64.01 cents, up 0.14 cent, March ended at 64.71 cents, up 0.17 cent and December 2021 finished at 63.48 cents, up 0.18 cent. Estimated volume was 21,613 contracts.