DTN Cotton Close: Struggling for Bullish News
DTN Cotton Close: Struggling for Bullish News

DTN Cotton Close: Struggling for Bullish News

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By Keith Brown DTN Cotton Correspondent

Cotton finished dismally lower Tuesday as the lack of bullish news weighed heavily on the market. In fact, the last news that the market faced was Friday’s cumulative sales and exports data, and it was viewed as bearish by the trade. To that end, we are not so sure this Thursday’s report will fare any better. As long as China remains an idle customer, the bearish burden on the market is both real and psychological. Of course, there is hope for cotton, as a trade deal will supposedly be signed by President Trump and Mr. Xi when they meet at a Florida resort in late March.

On a more bullish note for cotton, the U.S. dollar was lower Tuesday. Federal Reserve Chairman, Jerome Powell, testifying before Congress, expressed concerns over the nation’s twenty-two trillion and rising debt. While maintaining his dovish attitude towards interests, he nonetheless intimated not paying the nation’s bills was unacceptable. Yet, even a falling dollar could not keep most U.S. agricultural markets from falling today.

The technical trend remains steeply bearish and that is beginning to fly in the face of cotton’s seasonal tendency of rallying prices into the spring. Currently, the market is very near its contract lows and is fast becoming grossly oversold. Additionally, there is a sizable speculative net short position building in the trade. At some point, a corrective rally will unfold producing an upward corrective move.

May cotton closed Tuesday at 72.02 cents, down 1.08 cents, July was at 73.28 cents, off 1.05 cents and December finished at 72.68 cents, down 0.90 cent. Tuesday’s estimated volume was a slack 21,800 contracts traded.

Source: Agfax

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