Cotton Awaits Data

The cotton market is gingerly higher Tuesday morning as it considers the expiration price for spot December, USDA’s supply-demand update, and the potential action of the Federal Reserve.

The December 2025 contract expired Monday at 61.88 cents, well below the March contract’s current price. Some technical traders believe such switch-of-contract gaps will often be filled. 

Tuesday at noon EST, USDA will issue updated supply-demand tables via its December WASDE. Last release, the tabulators increased the U.S. 2025 crop some 900,000 bales, as well as reporting higher domestic and world carryouts. Tuesday’s expectations are calling for slight increases in all of the aforementioned categories.

The Federal Reserve will meet Tuesday and announce on Wednesday at 2 p.m. EST any action it will take regarding U.S. interest rates. According to the CME Fedwatch Tool, the odds for a cut have moved from an earlier 40% chance to the current 87% for a quarter-point reduction. 

This Thursday at 8:30 a.m. EST USDA will release another catch-up export sales report, covering the period from Nov. 13. Monday’s backlogged report (Oct. 30) had net sales for both crop seasons totaling 292,000 bales, with weekly shipments of 136,000 bales. 

Daily chart support for March cotton stands at 63.60 cents and 63.00 cents, with resistance hovering about 64.50 cents and 65.00 cents. Tuesday morning’s estimated opening volume is 6,455 contracts.

Keith Brown can be reached at commodityconsults@gmail.com or by calling (229) 890-7780.