By Keith Brown DTN Cotton Correspondent
Cotton finished moderately lower Wednesday as there were no new bullish market-moving events to propel it higher. In fact, one reason for cotton’s triple-digit move higher on Tuesday was the higher move in Chicago grains. In other words, there was something of a sympathy vote.
Still, even with Tuesday’s bullish planting progress numbers, the grains slacked off Wednesday. Additionally, another reason cotton rallied on Tuesday was its technicals.
That is, ever since topping at Easter, cotton’s trend has been down, with a record short position being held by the speculators. Now, with the end of the month approaching, there may be some incentive for those spec-shorts to cover.
In the grander scheme, cotton’s fundamentals are bearishly stacking against it. There is no trade deal, and not one in the offing. Additionally, despite adversities in the fields, the crop still looks large. Yet another negative is the height of the U.S. dollar. A strong dollar can discourage other exporters for importing U.S. cotton.
The market will be keenly watch Friday’s weekly sales and exports. The hope is big sales numbers will result from the 1200-point Easter break.
For Wednesday, July cotton settled at 69.06 cents, off 0.41 cent, December closed at 67.98 cents, down 0.49 cent and March was at 68.59 cents, down 0.42 cent. Estimated volume was 26,202 contracts.
