DTN Cotton Close: Suffers Huge Down Day
DTN Cotton Close: Suffers Huge Down Day

DTN Cotton Close: Suffers Huge Down Day

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By Keith Brown DTN Cotton Contributing Analyst

December cotton was sharply lower Tuesday amid worries over the midterms, Thursday’s supply-demand and Friday’s option expiration. Tuesday’s estimate volume was an astounding 61,000 contract traded. However, we sensed a larger portion of that volume was done on the Tuesday afternoon recovery.

Earlier in the season, prices caved well over 2.00 cents points down. However, bargain hunters and short-covering buying lifted the March contract forward to a near double-digit loss, with July closing out with only a double-digit loss.

Sometime on Tuesday there will be a consensus on the vote of the midterms. A Republican victory overall favors cotton as the Trump administration would deal with China from an element of strength at the G-20 trade talks. However, the midterms may also affect the U.S. dollar and the Dow Jones as well. A huge break in the Dow could influence cotton prices lower still.

This Thursday cotton will face the November supply-demand report and weekly sales and exports. It is expected the 2018 crop will be dramatically reduced, but physical business may be up in the air. Last week, sales were a net negative number as China was a massive canceler.

December cotton settled at 77.43 cents, down 1.44 cents, March went out at 79.27 cents, down 1.07 cents and December 2019 is at 77.84 cents, down 0.42 cent.

Source: Agfax

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