Cotton defied all rational thinking Monday, as the market finished the day sharply higher. The market is being driven by unrelenting demand and competition for acres. To the former, USDA will issue its latest export-sales data this Thursday, and traders are thinking very strong numbers will be seen, given China is back from its week-long holiday.

To the former, our witnessing new contract highs in new crop corn, beans and cotton has us thinking the fight for acres is still at full throttle. To that end, although it is a tad early for producers to actually plant, weather and field conditions are also deeply adverse.

The U.S. dollar eased lower Monday, causing its charts to cast a sour look. However, Federal Reserve Chairman Jerome Powell speaks to Congress this week as part of a mandated semi-annual testimony. Investors worry about his slant on growth and interest rates in a post-COVID-19 world. Too quick of a rise might force the Fed to tighten policy too quickly, while a complacent Fed also would pose overheating risks.

For Monday, May cotton settled at 92.41 cents, up 1.93 cents, July settled at 93.08 cents, up 1.87 cents and December cotton ended at 86.59 cents, up 1.09 cents; estimated volume was 29,770 contracts.