Cotton Hustles Higher Tuesday

Right on cue, the cotton market is higher Tuesday after being blatantly negative Monday. As the end of the month approaches, traders are likely re-thinking and squaring-up their positions for the new planting season.

March cotton is in its delivery and Tuesday saw 16 deliveries issued by Term Commodities. The delivery period runs through Monday, March 7. 

As the month of February draws to a close, traders will get a full dose of economic news this Thursday in several reports. The main ones will be Q4 GDP, Personal Income, and Jobless Claims, and of course tonight’s State of the Union address by President Trump.

On Thursday, USDA will release another weekly export sales report. Last week saw a combined seasonal sales number of 335,663 bales, for which the old crop was a marketing-year-high amount. Weekly shipments were 172,6000 bales, off 9% from the previous week.

Then on Friday at 3:30 p.m. EST, the CFTC will issue another Commitments of Traders report. This past week showed managed-money funds had net sold some 3,900 contracts, swelling their current bearish position to 79,508 contracts. For context, their record high negative carry from last October stands at 81,343 contracts.

Chart support for July cotton stands at 66.10 cents and 65.85 cents, with resistance around 67.70 and 68.00. Tuesday morning’s estimated volume is 24,376 contracts.

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