Over the weekend, President Trump and President Xi agreed to the break in economic hostilities in order to give negotiators an opportunity to find an acceptable resolution to the war. However, after nearing limit-up (+300) early in the morning Monday, the market eased back late Monday afternoon to finish 170 higher.

Still, this is the first “positive demand news” the market has had since the origination of the trade tariffs back last June. At that time spot cotton was trading at 94 cents, but promptly dropped 20-plus cents over the course of the growing season, sloughing off the effects of a major drought and two huge hurricanes.

Overall, the basic fundamental drivers of the market are improving. Initially, there is news of a potential Chinese comeback as a U.S. cotton customer. Secondly, the U.S. dollar is weakening as the Federal Reserve has recently been softening its tone on hiking interest rates. Thirdly, cotton’s seasonal tendency is to push up and away from its fall harvest low. Lastly, there may be additional crop losses seen in both United States and India.

Monday afternoon, USDA will issue another crop progress number. Last week the overall crop was roughly 70% gathered, however, new weather advertises are hampering progress in the South to the point that the “harvest needle” may not have moved that much for Monday afternoon’s report.

The latest commitment of traders data, as of November 27, shows non-commercial traders were net long 43,237 contracts, a decrease of 3,034 contracts. This action continues to underscore the belief bullish speculators have been paring their positions. However, the aforementioned fundamentals may stem that flow. Monday’s estimated volume was 45,200 contracts traded.

Spot December cotton settled 78.91 cents, up 1.74 cents, March was 99.95 cents, up 1.04 cents and December 2019 finished at 78.04 cents, up 1.01 cents.