By Keith Brown DTN Cotton Correspondent 

The cotton market was sharply lower Friday as the adverse effects of the Wuhan virus simply will not abate. To that end, about midday Friday several major U.S. airlines announced they will be halting service to China, which in turned caused the Dow Jones, already down 250 points, to spike another 250 points lower.

That decline influenced spot March cotton over the bearish edge. Friday also likely saw end-of-the-month squaring by speculators. Obviously, until the global markets began to sense the coronavirus is adequately contained, most rallies across various global markets will likely be met with selling.

Next week’s calendar for cotton includes export-sales on Thursday, and March option expiration on Friday. With cotton total open interest at 266,900-plus contracts, the highest concentration since November 2018, there seems to be room for some liquidation. To reiterate, the overarching fundamental for cotton and all other markets is the coronavirus.

Friday the bullish uptrend of the market was definitely challenged, as spot March closed outside of a well-defined trend-channel pattern. Additionally, several popular technical indicators, such as moving averages, are beginning to roll over and down to possibly hook bearish. Such a crossing would cause trend-following and algorithmic traders to possibly sell the market short.

For Friday, March cotton settled at 67.50 cents, down 1.55 cents, July ended at 69.19 cents, down 1.31 cents and December finished at 68.73 cents, down 1.22 cents. For the week, spot March was down 1.90 cents and for the month it was off 1.55 cents. Friday’s estimated volume was 52,208 contracts traded.