By Keith Brown DTN Cotton Correspondent
The cotton market was sharply lower Tuesday as traders begin to question the validity of bearish fundamentals, versus the hope of a trade deal with China next month. Last week, USDA posted bearishly construed sales and export data, along with a negative supply-and-demand report on Thursday. But the market discarded those reports and rallied on the hope of a U.S.-China trade deal. However, in the void of recent news concerning the trade deal, the market felt the need to retreat.
However, another reason for Tuesday’s decline may relate to the impending harvest. Already, the 2019 crop is 8% gathered, but that leaves 92% left to be harvested. In the face of 21.86 million yet to come, the sheer weight of such selling pressure may be enough to sink prices even lower.
Looking beyond Wednesday, traders will be keen on Thursday’s weekly sales and exports. Last week, sales were a dismal 74,000 bales sold for the current crop year, and a mere 500 bales for the 2020-21 season.
For Tuesday, December cotton finished 61.38 cents, down 1.21 cents, March finished at 61.86 cents, off 1.10 cents, and December 2020 ended at 64.65 cents, off 0.82 cent. Tuesday’s estimated volume was 35,536 contracts.
Source: Agfax