The cotton market was lower Friday as USDA’s double month supply demand data proved uninspiring. The agency did lower the U.S. 2018 crop by 200,000 bales, which now is pegged at 18.40 million bales. USDA lowered domestic use by 100,000 bales and kept exports unchanged at 15.00 million bales, which all resulted in U.S. carryout falling 100,000 bales or 4.30 million bales.
In the world numbers, there was an increase in global stocks of 2.30 million bales. Carryout stands number of 75.50 million bales. That number was accomplished by a ton of production increases as well as a ton of production offsets among the major producing nations. At any rate, traders pretty much took Friday’s report as ho-hum.
One reason for their lethargy is that most traders understand the dynamics of the cotton trade can easily flip with the arrival of a U.S./Chinese trade agreement. Next week, a U.S. delegation is scheduled to fly to Beijing to start a third round of talks. The deadline to avoid increased tariffs is March 1.
There are a couple of other deadlines not necessary as directly affected on cotton, but important nonetheless. One is the Brexit vote to solve Europe’s economic situation, and the other comes next Friday, when the potential second government shutdown if wall funding fails looms large. For the week, spot cotton was down 1.08 cents.
March cotton was at 72.55 cents, down 0.26 cent, July was 75.01 cents, off 0.30 cent, December concluded at 7.39 cents, down 0.60 cent. Friday’s estimated volume was 52,878 contracts.
