By Keith Brown DTN Cotton Correspondent 

The cotton market finished slightly higher Monday, as traders continue to assess the meaning of a U.S.-China verbal trade agreement of last week. Negotiators from sides worked feverishly all week to head off any new trade sanctions. In fact, additional tariffs were to be levied on China Sunday.

However, in a near eleventh-hour move, China agreed, in principle, to buy a massive amount of U.S. farm products, while the U.S. signaled it would roll back some tariff charges. Still, the bottom line for global markets is the lack of clarity and timeline for implementation.

The U.S. dollar remains under some selling pressure after the Federal Reserve left interest rates unchanged last week. Moreover, the Fed indicated it would keep rates steady probably until the spring of 2020. The U.S. dollar index is trading at its lowest level since July 2019.

Some selling pressure is hitting the U.S. dollar as Chinese retails sales were higher than expected, and the Conservative Party handily won the UK elections, strengthening the British Pound. A weaker dollar is seen as a fundamental positive for U.S. agriculture, given it takes less of another country’s currency to convert into U.S. dollars.

Per our morning comments, the most recent CFTC data showed bearish speculators greatly reducing their bearish positions. To that end, with some technical indicators, such as moving averages beginning to generate a change in trend, it wouldn’t take much higher price action to cause those particular traders to reverse course.

Monday, March cotton ended at 66.97 cents, up 0.17 cent, July closed at 68.99 cents, up 0.12 cent, and December finished at 68.90 cents, up 0.12 cent. Monday’s estimated volume was 28,989 contracts.