In the Thursday morning comments we suggested we were confused by USDA’s weekly report with all of its switching about of cotton sales from China to other countries. In fact, a couple of subscribers called in to take us to task for our admittance. Yet, the market must have been confused as well, as it sold off nearly 1.00 cent Thursday. Altogether by session’s end, the market had somewhat pared its losses. Pretty much an accepted trading principle is the market — actually any market for that matter — disdains uncertainty and virtually always takes the bearish slant.

Apparently, we have a new farm bill. Last night the House overwhelmingly voted to pass the legislation and just ahead of the possible government shutdown. Vaguely speaking, there were a host of tweaks and adjustments to all sections, so we advise subscribers to visit the NCC website for summary details.

The market remains mired in sideways congestion to say the least. To drive that point home, one need only to look at the 36-day moving average which stands at 79.35 cents. The March market settled Thursday at 79.41 cents.

Simply put, when one averages the last 36 closings, the market is sitting on top of those prices. Although, we believe the 2018 harvest low is in, the market is definitely in need of fresh, bullish news to catapult it higher. We have been saying for weeks that “new news” should come in the form of a deal with China. However, China bought soybeans last night and they dropped 12 cents.

So, somewhat tongue-in-cheek, we’re not sure if we want China to buy cotton. However, there is a big difference between her buying a slug of cotton in the short-run and having a long-term trade relationship, the latter is quite bullish to the health of the market.

March cotton settled 79.41 cents, down 0.56 cent, July was 81.02 cents, down 0.53 cent and December 2019 finished 77.43 cents, off 0.30 cent. Thursday’s estimated volume was 21,400.