The cotton market closed higher Monday, despite USDA’s slightly bearish crop report. In that data, U.S. crop raised 800,000 bales to 17.80 million, taking ending stocks from 2.90 million to 3.30 million bales. However, world carryout was lowered by some 1.60 million bales. We will offer more insightful analysis in Tuesday’s morning commentary.
Monday afternoon USDA will issue its weekly crop condition update. With all the recent rains of late, some traders think the national crop will show improvement. For two consecutive weeks, it has been rated 52% good to excellent. Yet others believe there has been too much rain in several major acres, perhaps edging the crop backwards.
Monday’s stronger performance from the market is likely to encourage bullish speculators. To that end, Friday’s CFTC Commitments of Traders report underscored the fact that managed-money funds continue to carry a strong net long position.
Monday, December settled 88.16 cents, up 0.45 cent, March ended at 87.85 cents, up 0.45 cent and December 2022 closed at 79.61 cents, up 0.55 cent; estimated volume was 18,322 contracts.