December cotton finished 25 points lower as the market ignored better sales and exports numbers. The market did make one attempt to force new lows for the week, but additional short-covering type buying emerged to rally prices to unchanged levels.
Also, the cotton market did get some outside support from the Chicago grains, which rallied on news of Argentina potentially increasing the export tax on soybeans. The news resulted in a 20-plus cent rally in beans and a 10-cent rally for corn.
The big reach for cotton is, since China has switched some of its cotton buying to South America, then Brazil might attempt to take advantage of that situation with an export tax of her own.
Friday is the end of the week and already December cotton is down 330 points, week-over-week. Short of a major rally on Friday to pare losses, the market will commence Monday’s trade on a sour technical note. Most technical indicators continue to signal the potential for lower prices. Additionally, soon enough the harvesting process will pressure prices lower.
December cotton settled 7847, down 25, March finished at 7891, off 24, and December 19 closed at 7605, down 10.