The cotton market finished Monday’s session lower, despite the potential for a significant trade deal with China. Initially, the market was substantially higher as several news sources published stories on Sunday afternoon that a trade resolution was imminent.

The market had already experienced a sharp rally on Friday based on positive comments from Larry Kudlow, one of the Administration’s top economic advisers. Nonetheless, the cotton market, among many others (including the Dow Jones), simply could not stay aloft all day. Clearly, the market has yet to shake off its one-step-forward-two-steps-back trading behavior.

Although it is highly anticipated that a trade deal will be signed, one reason for the market entrenched choppiness is that a deal has not been signed. Additionally, another problem for cotton is the strength of the U.S. dollar. The Greenback continues to ride higher on the back of a very strong domestic economy.

During the month of March, the cotton market will receive a host of cotton specific information ranging from sales and exports, to supply and demand, to planting intentions. Of course, as always a real wild card during spring planting period is Mother Nature.

Already the Deep South suffered deadly and devastating storms this weekend. It is conceivable the 2019 crop could be less-than-expected, and delayed, if such hindrances persists.

Technically, the market remains is a steep downtrend. Recently, a rise in the open interest suggests new short-sellers have entered the trade. Still, if a new set of bullish dynamics emerges, then the potential for a spring rally heightens.

May cotton settled at 73.13 cents, down 0.72 cent, July finished at 74.09 cents down 0.76 cent, December ended at 73.15 cents, down 0.63 cent. Monday’s estimated volume was 28,755 contracts traded.