December cotton was fractionally lower Friday on volume of 21,200 contracts traded. That amount seemed decent enough, but one-third of that volume came in the last hour of trade. Moreover, the December’s daily range was a mere 63 points. Traders opted to ignore the widespread damage across the Florida-Alabama-Georgia cotton belt, instead choosing to focus on a stronger dollar, putrid sales and exports, and the U.S./China trade war.
On Monday, USDA issue its latest round on the crop’s condition and harvesting pace. The Georgia crop was revealed to be 54% very poor/poor. Yet, we are hearing that some fields away from the Storm’s direct path are attempting to recover to some degree. Although, we are still talking about 1500 pounds per acre cotton giving way to 300 pounds per acre. No question the wake of Hurricane Michael has changed the cotton industry in these three affected states for decades to come.
Also, next Thursday, USDA will issue another round of sales and exports. To that end, we cringe to think how much worse business may become. Still, we think the lynch-pin for improving cottons’ prices will be determined by the midterm elections. A strong Conservative win might entice the Chinese to return to the bargaining table and settle the trade war,
December cotton settled at 7791, down 13, March was 7936, down 13, and Red December finished at 7668, off 14 points.