December cotton traded both sides of Tuesday’s close, but finished lower. Thus far, the market has essentially slough off any potential devastation of Hurricane Michael to the Georgia cotton crop. Apparently, the market has been victimize by speculator liquidation and concerns about failing demand.
As subscribers know, the U.S./China trade war has really put the crimp on U.S. agricultural exports. However, Wednesday Secretary Munchin warned China not to devalue its currency, the Yuan. In fact, he said a stable Chinese Yuan would be necessary part of any trade agreement. We interpret that to mean some behind-closed-doors talks are occurring.
Thursday, USDA will release its weekly sales and export report at 8:30 a.m., and its monthly supply-demand data at high noon eastern time. Sales are hoped to be improved given the market’s duration under the 80-cent mark.
Supply-demand domestic production and carry-out numbers are expected to be somewhat reduced. Certainly, one country to watch is India. It is a big beneficiary of the U.S./China trade fuss, but she too might come up short on production.
Wednesday’s estimated volume was 16,900 contracts traded. December cotton settled 7680, down 21, March was 7804, off 3, Red December was 7600, up 3.