The market drifted lower again this week settling at 60.28 c/lb on December. 

The break out up to 62 c/lb last week has been wiped out as it appears that growers hedging in the low 60’s has then brought the market down again. This yo-yo theme could take hold for some time as any spikes in the market could quickly be wiped out with grower hedging. 

Outside of cotton, President Trump is facing the possibility of impeachment after trying to use his power to smear his rival Jo Biden. This is obviously a concern for markets. That said, China has removed some Tariffs on US agricultural goods which is a positive step, but otherwise news on the trade war remains thin. 

The USDA report showed stronger than expected sales which helped support the market yesterday. Reports are that the US crop remains in good condition and that 22 million bales should be achievable quite easily. 

Demand side there has been sporadic demand for afloat as mills continue to look for nearby shipments but not in any great volume. Pakistan is reporting a shorter than expected crop with lower qualities which did spur some enquiry but nothing major. Demand continues to remain a concern. 

Without wanting to be too negative in the current market, we still don’t feel there is any stimulus fundamentally for the market to go higher. Demand remains poor and the supply side looks plentiful.