By Keith Brown DTN Cotton Contributing Analyst
December cotton settled lower on Tuesday as crude oil collapsed. The sharp downdraft in crude was linked more to global economic weakness rather than just some direct Middle Eastern fundamental. To that end, corn, beans, wheat, the metals and the Dow Jones were all ailing Tuesday.
Tuesday’s selloff in spot December took it within 30 points of its October 1 low of 75.37 cents. Many analysts believed this level was going to be the harvest low for 2018. For now, it remains so, but being this close, it is hard to imagine it holding. Tuesday’s trade saw a fair amount of long liquidation by funds and speculators as the idea of slow or no demand from China is taking a root in the minds of many traders for the long-term. The estimated volume was 57,500 contracts.
Tuesday afternoon USDA will report on the condition and harvest progress of the 2018 crop. Currently, heavy rains are inundating fields from Texas to Georgia. Thus, both the quantity and quality of the crop is being impaired.
December cotton settled at 75.86 cents, down 0.52 cent, March was 77.66 cents, down 0.59 cent and December 2019 was 77.14 cents, down 0.45 cent.
