DTN Closing Cotton 07/16 13:39
Cotton Moderately Lower on China Comment
Cotton gave back about half of Monday's gains, reacting to comments from
President Trump on the China trade situation.
By Keith Brown
DTN Cotton Correspondent
The cotton market gave back about half of its Monday gains on Tuesday.
Although volume was light, Monday's up-day volume was not much better. The
market also sagged when President Donald Trump said, referencing the U.S./China
trade talks, "We have a ways to go." That utterance was obviously heard as the
two nations are nowhere close to a trade deal.
The trend of cotton remains steeply bearish, which is an understatement.
Speculators are record net short and the market continues to edge towards the
all-important psychological line of support at 60 cents. If that level were
breached, the February 2016 low of 54.19 comes into prominence.
Traders continue to watch crop development across the Northern Hemisphere.
While for the moment, the U.S. crop is rated a robust 56% good to excellent,
the cotton fields from Pakistan to India to China are suffering their own
various adversities. Therefore, it was surprising when USDA upped India's crop
some 500,000 bales on its last supply-demand outlook.
Wednesday, the Federal Reserve will announce its take on interest rates. It
is anticipated the Fed will lower the Fed Funds Rate one quarter of one point.
However, this move is supposedly already dialed in by the trade.
Tuesday, December cotton settled at 63.06 cents, down .89 cent, March
finished at 64.28 cents, off .72 cent, and December 2020, closed at 66.03
cents, minus .37 cent. Tuesday's estimated volume was 17,700 contracts.
Keith Brown Company
Keith Brown can be reached at firstname.lastname@example.org or by calling
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