By Keith Brown DTN Cotton Correspondent
The cotton market was able to shed steep losses from earlier in the session, to close moderately lower Thursday. Initially, the market became concerned over unsubstantiated comments for U.S. officials suggesting the U.S./China trade talks may extend into April. Since the first of the year, all the market had been hearing was that the late March meeting was set for the agreement to be announced.
In fact, there was to be a signing ceremony on March 30 in Florida in which President Trump and President Xi were to sign and shake. Of course, that plan is still in the cards, but as the days drag by, it becomes less likely to happen in March. A major sticking point for the entire agreement revolves around an enforcement mechanism. That is, the U.S. needs to know if China is abiding or not by the terms of the deal.
Thursday’s weekly sales and exports report was a bit encouraging. Besides being larger than last week’s report, China was the leader of old crop cotton buyers. As subscribers know, China has been a net canceler of old crop for some time. Thus, if the market were to see back-to-back export reports in which China emerges as a net buyer, such would be a market positive.
The U.S. dollar was higher Thursday as currency traders were taking position against a Brexit vote. Of course, a strong dollar is always detrimental to agricultural exports.
For Thursday, May Cotton closed at 74.30 cents, down 1.42 cents, July was at 75.45 cents, off 1.36 cents and December finished at 74.06 cents down 0.53 cent. Thursday’s estimated volume was 32,000 contracts traded.
