Commodity-market-review

Weekly cotton market 11/16/2020.

ICEUS:CT1!   COTTON NO. 2 FUTURES
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TECHNICAL ANALYSIS OF COTTON

Last week, ICE U.S. cotton futures closed lower at $68.4 cents per pound.
Hopes for a vaccine are fuelling the markets, Moderna announced very encouraging results on Monday. The pandemic continues unabated, we have just surpassed 54 million cases worldwide, with more than 1.320 million deaths . Faced with the second wave, Europe has been confined. The United States is the most affected country with more than 246,000 deaths and more than 11 million cases, and is also taking restrictive measures such as in New Jersey and Michigan.
Total cash transactions were 339891 bullets, 22630 more this week compared to 16224 the previous week.
Hurricanes Delta and then Zeta have hit the Delta and Southeast region in recent weeks.
-In the Southeast, harvesting resumed at a good pace early in the week thanks to dry and sunny weather, before being interrupted again on Thursday by storm Eta which brought strong winds and heavy rains to the coastal areas . The harvest is finished there between 45 and 57% depending on the state.
-In the Delta, the harvest progressed rapidly in excellent conditions. No rainfall was reported. Harvesting is 85-95% complete in the South Delta and 63-64% complete in the North Delta, and 89% complete in Arkansas.
Growers reported yields were slightly below expectations, but were generally satisfactory.
ICE US cotton stocks increased to 9,36331 bales, above the five-year average.

WEATHER IN THE UNITED STATES

The hurricane season in the North Atlantic is officially underway until November 30, and the U.S. cotton harvest is still underway. Rainfall in October was higher than normal, with over 200 mm falling in some areas of the southeast and delta regions particularly hard hit by hurricanes Delta and Zeta. Last week, storm Eta hit Florida, and the southeast experienced heavy rainfall, over 100 mm in some places, while the rest of the cotton belt remained dry. Cotton is particularly sensitive to rainfall at this time of year when the bolls are open. Moisture causes rot and discoloration of the cotton fiber.

ICE US CERTIFIED COTTON STOCKS

ICE cotton stocks for the full harvest season rose sharply to 93631 bales from 66598 bales yesterday. Stocks are above the five-year average for the same period.

THE DOLLAR

The DXY index representing the Dollar against a basket of foreign currencies closed last week up to 92.755, after a sharp decline in early November. The U.S. elections will continue to bring volatility to the currency market. Joe Biden will be sworn in on January 20, the Senate remains Republican for now, but a second round will be held on January 5 in Georgia. There is still a lot of uncertainty about the size and date of the famous plan to support the American economy. The Fed has announced that it will increase its "firepower" if necessary. Forex traders therefore anticipate an increase in the money supply.
The pandemic is not weakening, Europe has reconfirmed itself in the face of the second wave, the United States is also taking new measures of restrictions in certain states. The hope of a vaccine, with the announcement of Pfizer , calms the markets and prevents for the moment the dollar from playing its role as a safe haven. Caution is still called for, however, as many questions about vaccines remain unanswered. The dollar has a strong influence on the price of raw materials, and it will be very difficult to predict its evolution in the coming months.
A low dollar is generally favorable to the dollar-denominated raw materials market.

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