By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market experienced a “strange session” Tuesday, as the market was off 3 cents before the WASDE at noon. We think speculative selling and position realignment were the drivers, which ultimately resulted with a limit-down settlement. Fundamentally, the WASDE report itself was friendly enough. It showed a 150,000-bale reduction to the 2020 crop, and a 100,000 bale-cut to domestic carryout. Additionally, world ending stocks fell over 1.16 million bales. Nonetheless, none of that mattered, as rigorous selling overwhelmed any attempt at recovery.

March cotton expired Tuesday at 82.77 cents. It’s discount close to the other old-crop months implies further declines may be in the offing.

The market anxiously awaits Thursday’s weekly exports sales. Given Tuesday’s wretched trade, the market is hoping for bullish numbers. Last week saw lower sales but stout shipments.

Technically, the market has decidedly worked off its overbought condition. The origins of that pattern started last October. Of course, that is not necessarily a “buy signal,” but it is one less negative nuance to dog the market.

Tuesday, May cotton closed at 84.32 cents, down 4 cents, July settled at 85.29 cents, minus 4 cents, and December ended at 81.40 cents, off 3.94 cents. Tuesday’s estimated volume was 49,787 contracts.