Cotton Suffers Tuesday Turnaround

After most commodity markets enjoyed a higher first-of-the-month Monday, most are keenly lower Tuesday. A strong U.S. dollar, an unsettling Chinese export situation, and the U.S. government shutdown continues to undermine most markets and traders.

This Friday, options on the December contract will expire on the close of the ICE futures. Their passing will greatly affect the market’s total open interest levels. 

USDA has announced it will release an updated 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.

December cotton will enter its delivery on Nov. 21. Thus, all traders, except those intending to participate in the notice process, will have to liquidate or roll forward in time.

The U.S. dollar continues to move higher Tuesday morning. It is drawing inspiration from the possibility of no more interest rate cuts this year, as well as superior earnings from the stock market companies.

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. Tuesday morning’s estimated volume is 11,119 contracts.

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