Taking its cue from improving outside markets, cotton is trading higher Tuesday. On Monday most markets sharply fell in fear of the omicron variant, but after Moderna indicated its vaccine would hold up against it, the Dow and related markets initiated a recovery which carried over into Tuesday’s trade.
The cotton market will trade an abbreviated week with the ICE futures not trading this Friday. On Thursday, USDA will release its weekly export sales data. Last week’s report did show improving sales and shipments, but the supply chain situation is a massive hindrance to the cotton industry.
As the markets head towards the Christmas weekend, daily trading volume may taper off, and daily trading ranges should narrow. After Friday’s Commitments-of-Traders report revealed that managed money traders still hold a huge net long position, there are rising concerns the market could be vulnerable to liquidation if certain support levels are negated.
For Tuesday, close-in support for March cotton is 104.25 cents and 103.10 cents, while resistance stands at 107.00 cents and 108.20 cents. The estimated morning volume is 4,428 contracts.
