The cotton market was decidedly lower Thursday as a strong U.S. dollar left traders with negative vibes. The strength of the dollar was partly due to a weakening European economy, as the European Central Bank (ECB) forecasted slower growth for the coming year. Also, a strong dollar might act as a surrogate tariff, even if a trade deal with China is reached. A strong dollar always hampers U.S. agricultural exports as it takes more of the other countries’ money to convert to U.S. dollar to buy U.S. goods.

Another negative were comments made by President Trump indicating if the U.S./China trade deal was not a good deal for the U.S., then it would no deal. That is, he would walk away. We would venture to say such an act would damage market psychology and market sentiment.

A third negative was Thursday’s weekly sales and export report. Essentially, net sales were higher, but China again was a net canceler of old crop purchases. To that end, USDA will issue its monthly crop report for March on Friday. Industry expectations are calling for less U.S. exports, which in turn will hike domestic carryout.

March expired Thursday at 71.90 cents, down 1.15 cents.

For Thursday, May cotton closed at 73.11 cents, down 1.10 cents, July was at 74.30 cents, down 0.92 cent and December closed at 73.38 cents, down 0.18 cent. Thursday’s estimated volume was 311.500 contract traded.