By Keith Brown DTN Cotton Correspondent
The cotton market was sharply lower Friday capping off a week in which prices only took a single direction — Down. For the week July cotton was off 7.23 cents, with new crop December faring no better being down 5.02 cents. From a fundamental news stance, the market never had a bullish chance. From Sunday afternoon’s presidential tweet of hiking tariffs to Monday afternoon’s on-pace plantings, to Thursday’s weak sales and exports data, to Friday’s bearish supply demand report.
To the latter, USDA estimated the 2019 crop to be 22.00 million bales, with higher exports of 17.00 million, resulting a spike in carryout of 6.40 million. World carryout was also upped more than expected. Still, Friday’s numbers were estimates, as USDA has yet to report on the planted acreage. That number is being gathered and will be published at the end of June.
Another psychological sign of heightened negativity is not only the fact old crop July is trading under new crop December, but that new crop December closed under the all-important psychological the 70-cent mark. One has to go back to December 2017 to see new crop prices under that at 70-mark.
The trade war is reaching critical mass for U.S. agriculture. Straight up, some sort of financial relief is immediately needed. President. Trump is suggesting the U.S. government can buy U.S. farm products, but many consider that action as a short-term fix. Obviously, the solution is better trading relationships with China.
For today, July cotton settled at 68.45 cents, down 1.78 cents, December finished at 69.40 cents, off 1.17 cents and March closed at 70.37 cents, down 1.07 cents. Friday’s estimated volume was 44,900 contracts.
