Trade rumblings in the China-U.S. trade war are stirring up selling in the cotton market. Current negotiations between Treasury Secretary Mnuchin and his Chinese counterpart have yet to produce any meaningful resolutions. Thus, speculators are either liquidating long positions or worse, selling short.
Yesterday, in its most heavy volume day in recent weeks, December cotton failed to hurdle the all-important psychological ninety-cent mark. That failure left traders more than a bit queasy for today’s Wednesday session.
To that end, with the Federal Reserve presumably set to hike interest rates on the first of this new marketing season, cotton’s fundamentals do not seem as robustly bullish. For certain, now all eyes are now on the upcoming August supply-demand report on the 10th.
Currently, the ICE Futures are down about 50 points, on an estimated volume of 4,000 contracts.
Close-in support for December cotton is found at 8890 and 8840, with resistance at 8980 and 9000.