Cotton Starts November in Unsteady Fashion

The cotton market continues to trade wobbly as it tries to find stronger footing. Last week, the market finished with triple-digit gains, despite the fact the commodity was not directly mentioned in the U.S./China trade show. However, a stronger U.S. dollar, and the ongoing harvest across the Northern Hemisphere is making supplies readily available.

In the way of general news, the U.S. government’s partial shutdown has now entered its 34th day. U.S. stocks are higher on better earnings, which is playing to a stronger U.S. dollar. Currently, crude oil is finding support near $60, amid OPEC’s decision to keep production increases to a minimum into 2026. Gold is near $4,000 and could be capped due to the talk the Federal Reserve may not lower rates in December.

USDA announced they will release a crop report on Nov. 14, even if the shutdown continues. With that there are several crop estimates from private companies that are due this week.

An updated U.S. Drought Monitor was released last Friday. It showed that the U.S. planted area for cotton was showing 50% drought conditions. That number was down from a recent peak of reflecting 61% drought. Of course, given the time of year, dryness may actually help in the harvest process.

The 6- to 10-day weather outlook (Nov. 5-9) calls for above-normal temperatures for Texas and normal temperatures for the Delta and the Southeast. Rain-wise, Texas looks to have below-normal chances, as does the Delta and the Southeast.

Daily chart support for December cotton stands at 65.00 cents and 64.50 cents, with resistance at 66.10 cents and 66.75 cents. Monday morning’s estimated volume is 20,997 contracts.

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