By Keith Brown DTN Cotton Correspondent
The cotton market settled slightly lower Wednesday on notions that the U.S.-China trade talks are nowhere close to being solved. To that end, as there is no official time for the two countries to meet face to face. Just this week, President Trump publicly labeled the Chinese as cheaters, which, no doubt, insulted them. To that end, the Chinese are watching this week’s impeachment proceedings with great interest, as any political weakness inflicted upon the President might alter China’s trade negotiations calendar.
However, a Wednesday afternoon breaking story from the Wall Street Journal indicates China is hesitant to commit to a specific amount of agricultural products. Additionally, Beijing is also showing resistance over U.S. demands for more tech transfer restrictions and a strong enforcement mechanism for a deal. Last month President Trump said China had agreed to buy up to $50 billion in U.S. farm goods as part of the so-called phase one trade deal. We would see this new twist as obviously bearish to U.S. agricultural markets.
In other news, Federal Reserve Chairman Jerome Powell told a congressional committee Wednesday, the central bank is unlikely to move on interest rates given the “sustained” economic expansion. The Fed has cut its benchmark rate three times this year to a range of 1.5% to 1.75%.
As a reminder weekly sales and exports are delayed till Friday morning at 8:30 a.m.
For Wednesday, December cotton closed at 64.22 cents, down 0.52 cent, March finished at 66.05 cents, down 0.45 cent and December 2020 ended at 68.47 cents, down 0.23 cent. Estimated volume was 60,802 contracts.