By Keith Brown, DTN Cotton Correspondent
Cotton made little forward progress Tuesday, as spot May closed lower while deferred contracts ended higher. Since last Thursday, when USDA’s seemingly bearish crop data altered the market’s fundamental landscape, spot cotton stands less than two cents lower.
Obviously, the cotton market is waiting for some sort of “green light” from other financial and commodities markets before pursuing higher price levels. To that point, quarterly earnings are being reported, and some banks stocks are cratering as mortgage defaults are swelling.
Specific for cotton will be this week’s export-sales data and weekly jobless claims on Thursday. Last week saw China cancelling enough old crop purchases to render a net negative 2019-20 sales number. Yet, Tuesday, China reported a strong first-quarter buying pace of U.S. cotton for 2020.
The jobless claims data is essentially self-explanatory. A low number is positive, while a higher number is taken as negative. Over the past three weeks, applications for unemployment funds have swelled to over 15 million people.
Street talk suggests a top end number will be about 30 million unemployed people, a number greater than the Great Depression during the 1930s. That would translate into a massive amount of lost textile and apparel sales.
May cotton closed at 52.51 cents, down 0.25 cent, July cotton finished at 53.18 cents, up 0.11 cent and December settled at 55.33 cents, up 0.01 cent. Tuesday’s estimated volume was 42,039 contracts.