The cotton market is still holding positive after Monday’s wild ride. Sunday night the market got the word of a trade truce with China and prices responded by trading nearly limit-up. Yet, as the session wore on, it became apparent specific trade details were lacking.
Although China did agree to immediately buy a massive amount of U.S. agricultural products,” no money has hit the table” as the old mercantile maxim goes.
Thus, disappointment began to infect the euphoria and prices tumbled off their highs. The cotton market did close 100 points higher, but obviously it is hungry to see actual export business getting done.
On the international scene, India’s cotton crop is apparently coming up short. All season it was known the monsoonal rains were off their normal pace by an estimated 10%, but it may have been misjudged.
The top two producing provinces, Gujarat and Maharashtra, were in a full-blown drought. Last season, Indian production was 36.5 million bales, but private forecasters have lowered this season’s production between 32.5 to 33.0 million bales.
The Cotton Association of India has pegged the crop 34.0 million bales.
For today, close-in support for March cotton is 79.50 cents and 78.90 cents, with resistance at 82.00 cents.