The cotton market traded sharply lower in Monday’s session but was able to cut a portion of those losses into the afternoon close. Fear the upcoming U.S.-China trade talks would yield no real resolution was the driver of the day. However, the inclination the U.S. crop is getting more robust also was a bearish factor on prices.

Last week, the government rated the crop at 60% good to excellent. That level was way above last year, as well as the 10-year average. USDA will issue another round of numbers Monday afternoon at 4 p.m. ET.

The U.S.-China trade talks will resume this week in Shanghai, China’s larger port city. Despite the low expectations, it is hoped China will increase her buying of U.S. farm products, even while the talks continue. Recently, China did allow several U.S. bean purchases to come in duty-free.

This week may also see the Federal Reserve lower interest rates. While the Fed has resisted the President’s cheerleading about cutting rates over the past few months, it may act accordingly this week as it believes the tariffs are slowing the U.S. economy.

A third event for this week is Thursday’s weekly sales and exports data. Last week was a definite improvement over the prior two weeks, with China a small buyer in the new crop.

A bearish aspect for U.S. exports lies with the U.S. dollar. A strong dollar is often detrimental to U.S. exports, while a weaker dollar can encourage more business, unfortunately, virtually every country in the world is keeping their interest rate at zero to negative, hoping their cheaper currency will encourage those exports.

Monday, December cotton settled 64.21 cents, down 0.33 cent, March finished at 65.19 cents, off 0.27 cent, and December 2020, closed at 66.07 cents, down 0.23 cent. Monday’s estimated volume was 16,700 contracts traded.