By Keith Brown DTN Cotton Correspondent 

The cotton market moved sharply higher Friday, coming within 0.15 cent of its 65.85-cent monthly high, then cascading sharply lower to finish slightly higher. Earlier in the day, major news-wires were reporting U.S. trade representative Robert Lighthizer and China’s top negotiator Liu He had come to near “handshake terms” over several key issues in the phase one talks.

Apparently, China committed to buying up to $20 billion of U.S. Agriculture, and the U.S. agreed to shelve the December tariffs. However, going forward China also wanted all U.S. tariffs eliminated before other deals can be made. We are pretty sure that latter demand will not fly.

For the week, December cotton was down 0.26 cent. It truly has been a time of consolidation as the market had eyes on the weather, the harvest and the Chinese. Looking ahead to next week, the market will key in on Monday’s crop harvest data and Thursday’s weekly exports-sales. There exists the possibly of some position squaring by speculators and index funds.

We understand the 200-day moving average, a highly watched technical indicator, falls in about the 66.50 cents level basis the December contract. A close above that line ought to encourage additional buying, perhaps taking the speculators net long the trade.

For Friday, December cotton closed at 64.90 cents, up 0.25 cent, March ended at 65.83 cents, up 0.33 cent and December 2020 finished at 67.12 cents, up 0.29 cent. Estimated volume was 33,138 contracts.