By Keith Brown DTN Cotton Correspondent
The cotton market nosed-dived 2.00 cents lower Monday on fears of slowing trade and increased production. Monday’s bearish rout started with Saturday’s producer survey from the National Cotton Council. That member poll suggested increased acres for 2019, and, therefore, increased production. The survey indicated a 22.50 million-bale crop for 2019, compared to 2018’s 18.40 million bales.
Other bearish news for the market is the possibility of another government shutdown this Friday and lingering hopes for a trade deal with China. Currently both sides in Congress are at odds on how to “politically fund” a border wall, with some the conditions be offered edging on the side of ridiculous.
As far as the U.S./China trade talks, the two sides supposedly meet late this week, but even the U.S. people are saying the space between a deal and no deal is widening. After March 1, additional U.S. tariffs will be placed on all Chinese goods.
Technically, Monday’s bearish collapse violated the January low of 70.65 cents, leaving traders expecting even worse prices levels. Monday’s volume was an astounding 82,675. We have to go back to May of 2018 to find a session with more volume.
March cotton settled at 70.55 cents, down 2.00 cents, July was at 73.13 cents off 1.88 cents and December was at 72.70 cents, down 1.23 cents.
