By Keith Brown DTN Cotton Contributing Analyst
December cotton was sharply lower as the Dow Jones declined and the U.S. dollar accelerated higher. The Dow mostly broke on news of Apple’s poor performance, but we also think the news of Democrats intended Trump investigations were negative as well. On the dollar, it is the same old story of higher interest rates, plus the implementation of Brexit is hurting the Euro.
Technically, cotton violated and closed below a support line dating back to its October 1 Low. Into the close, additional selling came in from speculators, as well as long liquidation from bullish traders. Estimated volume Monday was a hefty 55,900 contracts trade.
When one looks at cotton, crude and lumber, one begins to ask is a recession on the horizon. Of course, the main enemy for cotton is the lagging demand. It seems China has been cancelling previously purchased cotton every week, while upping her business with India.
In fact, we understand India shipments are up 25% over last year, a direct result of the U.S./China trade war. The U.S. and China have scheduled talks at the G-20 meeting on November 30. At this point, those talks are becoming something of a do or die effort for both sides.
Tuesday the U.S. government comes back to work. Thus, USDA will issue its day-delayed crop harvest/crop condition data. To that end, harvest has been slowed with the excessive rains coming across the Southeast.
December cotton settled 76.38 cents, down 1.71 cents, March 78.25 cents, off 1.61 cents, and December 2019 at 77.59 cents, down 0.70 cent.
