DTN Cotton Close
Posted : October 23, 2021

DTN Cotton Close: Market Sheepishly Lower

October 11, 2021

After a pretty wild Sunday night, the cotton market was very muted for much of Monday’s day session. Some hedging selling from commercials was evident, while other selling included speculative profit-taking. Just last week the market had zoomed to a 10-year high, as fears of production losses across the Northern Hemisphere fueled the bullish trend.

However, with clearing weather in the Southeast, as well as seasonal harvest pressures, some traders are quick to think a momentary top may be in place. To that end, Tuesday’s monthly supply-demand update should provide further insight.

Tuesday, USDA will issue its monthly crop report. Traders are anticipating slightly friendlier data versus last month’s information, with lower production, higher exports and lower ending stocks. For the world numbers, both production and carryouts are expected lower.

Also on Tuesday, traders will see the delayed crop harvest/condition report. Recently USDA had elevated the 2021 Crop to 62% good to excellent, with some 13% harvested versus the five-year average of 19% gathered.

The short-term weather outlook calls for heavy rainfall across eastern Texas and Oklahoma, moderate rain for the western Delta, light rainfall in northern Mississippi, but dry conditions across the Southeast. The six- to 10-day forecasts below-normal rainfall for West Texas and the Delta, while the Southeast sees near-normal rain chances.

For Monday, December settled at 109.79 cents, down 0.81 cent, March ended at 107.24 cents, minus 0.67 cent and December 2022 ended at 89.76 cents, 1.08 cents higher; estimated volume was 42,923 contracts.

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