The cotton market posted another bearish day as the trade talks with China seem to have failed even before they have begun. President Trump has suggested the Chinese are deliberately stalling on a deal, hoping to deal with a different U.S. president in 2020. Moreover, he indicated he is willing to level an additional $350 billion in new duties at the Chinese if no deal happens. Additionally, the President has expressed his outrage that the Chinese have not bought massive amounts of U.S. farm products as promised at the G-20 meeting.

Another negative for the trade Tuesday was USDA’s latest crop ratings. Currently, the U.S. Crop is rated 61% good to excellent. That level is above last year pace for sure, but is also double-digit higher on the 10-year average. The last supply-demand report showed the 2019 Crop at 22 million bales. With the next report some nine trading days away, the government could likely increase the size and scope of the crop.

The Federal Reserve will announce its decision on interest rates Wednesday. The guesses range from a quarter-point cut, to a three-quarter point reduction. If it comes, it will be the first rate cut since the Great Housing Crisis of a few years back. Supposedly, lower rates weaken the U.S. dollar, which in turn opens up the export market. However, so many countries have already lowered their rates to net-negative standings, keeping the U.S. dollar the currency of choice for the global investor. Thus, by default the dollar remains strong.

For Tuesday, December cotton settled at 63.36 cents, down 0.85 cent, March finished at 64.28 cents, down 0.91 cent and December 2020 settled at 65.45 cents, off 0.62 cent. Estimated volume was 15,700 contracts traded.