DTN Cotton Close: Market Lower in “Yawner” Trade
DTN Cotton Close: Market Lower in “Yawner” Trade

DTN Cotton Close: Market Lower in “Yawner” Trade

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December cotton doubled its decline from Monday. That is, after Monday’s wide range of 200-plus points inspired by the Canadian trade euphoria, cotton settled down 6 points. Tuesday, the market closed 12 points lower. Of course, Tuesday’s estimated volume of 19,000 was nowhere close to that of Monday’s stunning 48,000 contracts trade. However, going nowhere on big volume still points to a typical slow harvest trade the market is reflecting.

Both domestic and foreign merchants understand a big crop is forthcoming, so there is little incentive for them to chase prices higher. On top of that, the U.S./China trade war continues to cast a dark cloud over the cotton trade. Yet, the market has nearly come full circle with its prices. That is, from January’s 74-cents, to June’s 9400 high, to the current October low of 7537.

Looking ahead to Thursday, USDA will issue another round of weekly sales and exports data. The last few weeks have seen dismal numbers, however now that the market is under the 80-cent mark, perhaps some better business will be generated.

Also on Friday, the Labor Department will issue its monthly jobs data. Of late, this report has proven to be a two-edged sword for cotton. On one hand, a strong economy suggests strong domestic demand for cotton textiles. On the other, however, a strong economy suggests the need for the Federal Reserve to hike interest rates, thus strengthening the U.S. dollar, which is an impediment to exports.

December cotton settled 7619, -12; March was 7692, down 13; and December ’19 finished at 7572, down 18.

Πηγή: Agfax

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