Cotton Slams Into Turnaround-Tuesday

After a bearish-defying Monday, the cotton market has completely reversed, and then some on Tuesday. Traders continue to see a strengthening U.S. dollar, along with weaker outside metals, energies, and grain markets. Also, Monday’s cotton condition numbers showed the crop somewhat improving.

USDA issued its crop condition data Monday. That weekly report showed 46% of the domestic 2026 was rated good to excellent, up from 45% the previous reading, but still below the year ago pace of 55%. The five-year average for this date is 49% good to excellent. Texas was 34% good to excellent, up from 30% last week, but still down from 50% a year ago. Texas’ five-year average is 37%. The crop at-large is progressing at a normal pace, with 45% setting bolls versus 42% a year ago, and compared to the five-year average for this date of 45%.

Tuesday, the Federal Reserve is meeting to discuss U.S. interest rates, under its new chairman. That decision will be publicly conveyed at 2 p.m. EDT Wednesday. Currently, there is a 66% chance the central bank will not do anything. However, some governors would like to hike rates immediately.  

Crude oil continues to extend lower Tuesday. The pause in fighting between the US and Iran is raising hopes for a de-escalation in the Middle East conflict. Supposedly, Tehran has rejected reports that it has agreed to a 10-day ceasefire. Nonetheless, President Trump is still considering a “massive attack” on Iran.  

Chart support for December cotton stands at 79.45 cents and 78.75 cents, with resistance around 81.15 cents and 82.05 cents. Tuesday morning’s estimated volume is 7,484 contracts,

Keith Brown can be reached at commodityconsults@gmail.com or by calling (229) 890-7780.