DTN Cotton Close 27-Aug-2021
Posted : October 23, 2021

Market Ends Friday Higher

August 27, 2021

By Keith Brown, DTN Contributing Cotton Analyst

The cotton market finished its Friday session in the plus column as Ida was upgraded to Hurricane status in an afternoon update from NOAA and the Federal Reserve’s comments were friendly to the financial markets.

Ida is expected to make landfall on the Louisiana coast as a CAT-3 hurricane. The warmer waters of the Gulf of Mexico will be the integral part for it to ramp up in intensity. As of this writing, the City of New Orleans may be a prime landfall site.

Earlier Friday, Chairman Jerome Powell announced the Federal Reserve would indeed begin its “tapering process” before the year is over. However, he also said an increase in interest rates would not necessarily follow. As he worded it, “there is still a lot of ground to cover before interest rates are hiked”.

Friday afternoon, the CFTC will update its commitment of traders data. At the August high of 96.71 cents, the managed-money funds held a net long position of 80,000-plus contracts. That level surpassed their February high amount of 73,000 contracts. Yet, since this past Tuesday, the market has seesawed in its trading, and with month’s end next week, they may have reduced some of their position.

As a reminder, USDA will issue its crop condition data on Monday. Last account the tabulators had the nation’s cotton crop rated at 71% good to excellent. That level is rivaling the modern day high of 87% good to excellent from 1987.

In a market summary, December cotton finished up 1.74 cents on the week, 5.45 cents higher on the month and 21.14 cents on the year.

For Friday, December settled at 94.84 cents, up 0.68 cent, March ended at 93.83 cents, plus 0.63 cent and December 2022 ended at 83.84 cents, 0.36 cents higher; estimated volume was 18,109 contracts.

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