DTN Cotton Close: Market Recovery Fails
DTN Cotton Close: Market Recovery Fails

DTN Cotton Close: Market Recovery Fails

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By Keith Brown DTN Cotton Correspondent

The cotton market gave back all of its overnight gains and then some, to close moderately lower Tuesday. A discouraging fundamental was the Trump Administration’s decision to pursue increased tariffs on China this Friday. That announcement killed the Dow Jones some 500 points lower.

Typically, traders think of the Dow Jones as the cheerleader for the U.S. economy and thus the general marketplace. Well, Tuesday there was nothing to cheer about. The markets are dialing in a deeper trade war. That is, one in which China places equal taxes on imported U.S. Goods. In rough math, the U.S. annually exports $100 billion of goods to China, while

she exports some $500 billion of goods to the U.S.Wednesday, spot May cotton expires. The importance of that will be technical, as it relates to the continuation charts. That is, if May closes lower than July, then typically July will migrate towards May’s final settlement price. As it stands, the May contract is 0.90 cent below the July. July cotton settled at 73.18 cents, down 0.37 cent, December closed at 72.63 cents, down 0.28 cent and March closed at 73.27 cents, down 0.37 cent. Tuesday’s estimate volume was 38,000 contracts.

Source: Agfax

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