DTN Cotton Close: Falls on Weak Financials, Shutdown

The market was worse Friday as, simply put, no one was interested in cotton ahead of the Christmas holiday. The market also was influenced lower by a supremely bearish Dow Jones and fear of a government shutdown. For the week spot March cotton was down an incredible 6.50 cents. Friday’s estimated volume was 39,400 contracts.

Next Monday, the ICE cotton will trade an abbreviated session with no trading on Christmas. The impasse of the trade war with China continues to haunt the market. There is a March 1 deadline for those negotiations, but thus far there has been little movement on that front. If they fail, the Trump Administration promises to increase current penalties and place new tariffs on all Chinese goods imported into the U.S.

The Federal Reserve’s increase in interest rates will be supportive to the U.S. dollar, and therefore a nagging bearish fundamental to U.S. cotton. Still, at some point, the market will level off and began to assess its opportunities for 2019. Still, without new positive fundamentals of either trade or weather, or both, the climb higher will be slow.

March cotton settled at 73.18 cents, down 1.88 cents, July finished at 75.96 cents, down 1.74 cents and December 2019 cotton closed at 74.06 cents, down 1.22 cents.