By Keith Brown DTN Cotton Correspondent
Turnaround Tuesday did not rear its head, and that is unfortunate. After Monday’s two-cent collapse, hopes were high for some sort of recovery. However, that was not to be. Outright speculative liquidation, as well as stop-loss selling sent the market lower. For the past two days, cotton has lost 2.77 cents. Interestingly, Tuesday’s volume was another huge day with some 69,500 estimated contracts traded.
The market is living in fear of a delayed deal with China, the potential for another government shutdown, and future cotton production increases for the new year. We continue to see its fears played out in lower prices and in the bear spreads.
Wednesday, U.S. Trade Representative Robert Lighthizer arrives in Beijing to renew trade talks. It is thought, however, the announcement of a breakthrough leading to a deal would come after the March 1 deadline so that the two presidents, Mr. Trump and Mr. Xi, would share in that glory.
The U.S. Dollar put in a reversal session Tuesday. After posting recent gains, the dollar put in a new high for the mov, and abruptly changed course. If there is follow-through selling on Wednesday, the dollar could began a serious break. It is though a decline in the dollar is always a positive fundamental for U.S. agricultural commodities, especially cotton.
March cotton closed Tuesday at 69.78 cents, down 0.77 cent, July was at 72.44 cents, off 0.69 cent and December finished at 72.37 cents, down 0.33 cent.
