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DTN Closing Cotton            10/16 13:40

   Cotton Lower in Unenthusiastic Trade

   Despite evidence of widespread crop devastation to the southeastern cotton 
crop, the market finished fractionally lower on moderate volume.


By Keith Brown
DTN Cotton Contributing Analyst

   

   Despite evidence of widespread crop devastation to the southeastern cotton 
crop, the market finished fractionally lower on moderate volume. All forms of 
social media provided a grim description of Hurricane Michael's devastation, 
yet the market essentially ignored the troubles. Estimated volume was about 
26,200 contracts traded. By ignoring the massive crop losses, the market may be 
signaling that it wants irrefutable evidence, and more importantly, an end to 
the U.S./China trade war. The U.S. midterm elections may hold the key. In our 
opinion, if the Republicans hold both houses of Congress, the Chinese may feel 
pressure to fix the fuss. However, if the Democrats take over, China may 
continue to wage the trade war until the new powers-that-be repeals all 
tariffs. 

   USDA will issue its weekly sales and exports this Thursday. Last week, U.S. 
sales improved as Spot Cotton was below the 80-cent market. The big picture: 
U.S. Dollar remains strong, the 2018 harvest will resume in full force over the 
next few days and speculators continue to liquidate long positions. 

   December cotton settled at $0.7833, down 39 points, March cotton was 
$0.7978, down 6 points, and Red December ended at $0.7680, up 2 points.

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


(BE)

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