By admin       2018-11-15

December cotton is higher Wednesday morning as the Southeast and other areas continue to be punished with unwanted rains. Producers who are supposed to be gathering have had to park the pickers under their shelters. It may be next week before fields are dry enough for harvest to resume. With that in mind, USDA did report its holiday-delayed harvest numbers yesterday. Basically the 2018 crop is 54% gathered versus the average of 61%. The government will no longer report a condition number since the crop stands at 96% bolls open, so it will either be harvested or is lost. Right now, a fair amount is being lost as episodes of heavy precipitation are putting fiber on the ground with quality suffering tremendously as well. It is worth noting December cotton came very close to posting a new harvest low Tuesday. The initial low of 75.37 cents came on October 1, and has held, thus far. However, the pressure of harvest, and more importantly the reduction in demand, is weighing heavy on the market. Towards the end of November, the U.S. and China are scheduled to meet in an attempt to resolve the trade war, a very bullish fundamental. Another big negative for cotton to battle is the persistently strong U.S. dollar. With the U.S. economy doing better than most other advanced economies, global investors are desirous of having dollar-denominated assets. Thus, the dollar swells in price. Additionally, in an effort to manage the U.S. economy, the Federal Reserve has been hiking interest rates. A new increase is expected in December, and as many as five more during 2019. The rule is, the higher the dollar trades, the more exports are negatively impacted. Close-in support for December cotton is 75.62 cents and 75.37 cents, while resistance is 77.10 cents and 78.10 cents.

Download App

# #

Member Login