Cotton Weighs Harvest, Deliveries

The cotton market is trading mixed Monday morning with spot December slightly lower, while the deferred contracts are slightly higher. Traders will likely see slow holiday volumes this week, as the ICE Exchange will be closed this Thursday.

There were 84 deliveries tendered against spot December on Monday. The issuers and stoppers were a mixed bag of trade houses, with most of the business possibly reflecting a fair amount of re-deliveries. The delivery process continues through Dec. 7.

Last Friday, the CFTC issued its Commitments of Traders Report. The data showed managed-money funds had net-sold some 11,586 contracts, pushing their overall net-short position to 76,326. Their current record stands at 79,986.

Monday afternoon, USDA will issue its weekly crop progress report. Roughly, the crop should be near 80% gathered.

This Thursday the market will be closed for the Thanksgiving holiday. Thus, all near-term USDA reports will be delayed by a day. That means export sales will be released on Friday at 8:30 a.m. EST. Last week’s data had sales of 198,000 bales.

Crude oil is lower Monday. Traders weighed the chances for a U.S. rate cut against the prospect of a Ukraine peace deal that ultimately could lead to an easing of sanctions on major producer Russia. The United States and Ukraine were set to resume work on a revised peace plan after agreeing that an earlier version overly favored Russia. This Thursday is the deadline, set by President Trump, for the two sides to come together. 

Daily chart support for March cotton stands at 63.60 cents and 63.10 cents, with resistance at 64.70 cents and 65.10 cents. Monday morning’s estimated volume is 9,987 contracts.

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