The cotton market was sharply lower Monday, victimized by fears of a government shutdown, higher interests, slow trade talks and a looming recession. Thus, against such a bearish backdrop across the financial and commodities markets, it’s no wonder buyers were few Monday.

To that end, in the market’s last delivery period, December 2018, a major Tennessee shipper was seen at the top issue of notices. Common sense suggest whenever a major cash shipper is shedding cotton, it must be for bearish reasons.

Additionally, as the current cotton market is showing such poor grades, the basis is dramatically widening on producers. Clearly, merchants are unwilling to bid on bales they cannot immediately turnaround and sell. Thus, the burden of carrying supply forward will rest upon the shoulders of farmers.

Until such time the cash business picks up, in other words a trade deal with China, that situation is here to stay.

Regarding the overall U.S. economy, it’s generally believed a recession is likely to occur sometime in 2019. The reduced growth now unfolding in Asia and Europe, will likely effect the U.S., not to mention the fact interest rates are on the rise, and liquidity is tightening. This Wednesday, the Federal Reserve is expected to raise interest rates one-quarter point.

March cotton settled at 78.57 cents, down 1.03 cent, July was 80.67 cents, down .067 cent, and December 2019 was 77.28 cents, down .041 cent. Estimated volume was 22,700 contracts.