By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market was sharply lower Friday, fearing further escalation of the U.S.-China political troubles. Earlier this week, the U.S. ordered China to close its Houston, Texas, consulate because of suspicious espionage activities. Infuriated, overnight China ordered the U.S. to close its consulate office in Chengdu, China. Such angry seesaw diplomacy cast a bearish cloud on the cotton market, which was already fragile from Thursday’s cotton cancellations basis USDA’s weekly export -sales report.

Another negative for the market was the fact Mother Nature seems to be letting up a bit. The recent weather outlooks calls for cooler and wetter action. Still, even with that potential change, it is hard to assess how much crop damage has already been infected to the Texas crop. The next supply/demand report is out on August 12.

Judging by Friday’s volume, Speculators were very active on both sides of the trade. Last Friday, the CFTC reported how all speculative categories had established net long positions. To that end, there was enough speculative fodder to feed the earlier downdraft, but when prices became too cheap, traders swarmed back in, pushing the December market above the 60-cent mark. Volume Friday was 31,957 contracts.

For the week, December cotton was down 1.84 cents, for the month, 0.78 cent down, and thus far for the year, it is down 9.06 cents.

Friday, December cotton closed at 60.10 cents, down 1.24 cents, March ended at 60.82 cents, down 1.81 cents and December 2021 finished at 60.71 cents, down 1.46 cents.