By Keith Brown DTN Cotton Correspondent
The cotton market was sharply higher Tuesday in a strong turnaround Tuesday performance. There was no specific news, but we understand the market may be thinking that a trade deal done between India and China could be positive. Recently, India allegedly sold China some 800,000 bales of cotton. The U.S. market took that as bearish as the U.S. did not get the business.
However, the new twist now is that with such huge numbers India is quickly paring down its supply of exportable cotton. Thus, if that is the case, then the U.S. may stand to benefit from any new further Chinese businesses. Add to that the possibility of a U.S./China trade deal, and suddenly cotton looks brighter (no pun intended).
The market is attempting to turn a possible technical corner. Certain frequently-watched indicators, such as moving average and momentum studies, are turning higher, and their activity may attract new chart buyers. Additionally, the speculative community is toting a new short position that could be a market positive.
For Tuesday, May cotton settled at 74.85 cents, up 1.65 cents, July closed at 76.04 cents, up 1.60 cents and December finished at 74.28 cents, up 0.77 cent. Tuesday’s estimated volume was 43,815 contracts.