By Keith Brown, DTN Contributing Cotton Analyst 

Tuesday’s strong follow-through from Monday’s surge quickly faded amid farmer and speculative selling.

Tuesday’s strong follow-through from Monday’s surge quickly faded amid farmer and speculative selling. At one time, the market posted triple-digit gains, but by session’s end, the ICE futures were less than 0.50 cent. Technically, spot July hit its 50% retracement level as measured for the January 74.00-cent high to the April 48.15-cent low, and that event brought in some chart-type selling. Volume Tuesday was a huge 40,000 contracts, but it still paled to Monday’s 66,000-plus traded contracts. One cause for Monday’s bullish move was the fear of adverse weather ruling over the West Texas Crop. Yet, with the new crop hardly off the ground, there is plenty of time for beneficial rains to fall in that area.

The market continues to face bearish fundamentals of slow demand and large supplies. In fact, over the weekend, China told its state-owned firms to halt large-scale U.S. soybean and pork purchases. We didn’t see where cotton was mentioned, but can it be far behind?

Additionally, the out-of-control riots across the nation are a huge negative for cotton. To that end, if the coronavirus doesn’t deter shoppers, certainly anarchists will. Since last Friday over 50 U.S. cities have been hit with a seemingly coordinated attacks on major metropolitan shopping districts.

The market is definitely anticipating this week’s export sales data. For several weeks, China was the dominant buyer U.S. cotton with huge purchases. But, over the last two weeks, its buying has dwindled, and now with this Hong Kong dust-up, traders fear possible cancellations.

For Tuesday, July cotton closed at 60.37 cents, up 0.31 cent, December settled at 59.50 cents, up 0.79 cent and March ended at 59.95 cents, up 0.71 cent.