Mumbai (Commodities Control) – Cotton jumped more than 1% to a one-and-a-half-year high on Monday, supported by hopes for a potential COVID-19 vaccine and a rally in the grains market, while strong U.S. data added to the upbeat mood.
In addition, South American weather continues to be essentially dry and that rallied the Chicago grains again. Lastly, the obvious technical uptrend, which is about to be eight months old, continues to draw in new speculative buyers.
The cotton contract for March 21 Cotton closed at 73.75 cents, up 79 points, having earlier reached its highest level since May. 7, 2019, at 74.27 cents. May ‘21 Cotton closed at 74.6 cents per lb, up 81 points and July’21 Cotton closed at 75.2 cents, up 80 points.
"AstraZeneca came out with its COVID-19 vaccine which looks promising, which is good for the cotton and stock market," said Keith Brown, principal at cotton brokers Keith Brown and Co in the U.S. state of Georgia.
Drugmaker AstraZeneca said its COVID-19 vaccine could be around 90% effective and will have as many as 200 million doses by the end of 2020.
"Cotton is also higher because of the grains. Corn, beans and wheat has reinstated their bullish move based on drying weather in South America," Brown added.
Chicago soybean futures rose to their highest level in 4-1/2 years on Monday, touching $12 a bushel as dry weather in key suppliers Brazil and Argentina stoked supply concerns.
U.S. cotton market faces stiff competition from other cotton growers like Brazil, which sell their produce at a cheaper rate.
Adding to the upbeat mood, data on Monday showed U.S. business activity in November expanded at its fastest rate in more than five years, pointing to a recovery from the pandemic's economic damage.
USDA’s Crop Progress report indicated that cotton harvest was 77% complete as of Sunday, up 8% on the week and 6% faster than the 5-year average. Harvest was 14% faster than normal in TX at 74% complete.
Total futures market volume fell by 5,024 to 21,606 lots.
Certificated cotton stocks deliverable as of Nov. 20 totaled 121,046 480-lb bales, up from 118,394 in the previous session.
The market will be closed Thursday in observance of Thanksgiving. Additionally, Friday’s cotton session will be an abbreviated one, opening at 8:00 a.m. and closing at 1:30 p.m. Eastern. However, that morning, USDA will issue its delayed export sales data.
Support and resistance for Cotton #2 lies at 72.11 cents and 75.11 cents per lb, respectively.
Commodities Control Bureau
0 Comments 
Post Comment 
