The cotton market had a hard day down along with others commodity and financial markets. The recent threatening tweets from President Trump, along with the arrest of the CFO of Huawei on Iranian sanctions violation, sent shock-waves though the global investing community. At one time Thursday, the Dow Jones was down 800 points.
In fact, for the last two days the Dow has been down some 1400 points. With financial turbulence such is currently happening, it’s nearly impossible for cotton to rally on its own fundamental merits.
Spot December cotton expired Thursday with a settlement of 78.02 cents, down 2.09 cents. This price is 1.06 cents below March 19 cotton. It is generally accepted that the market often moves so as to cover any switch-of-contract gaps left behind. Thus, March may very likely ease down to the settlement price of the December over the next few days.
Friday, USDA will issue its latest weekly sales and exports report. We are expecting that data to still show lagging cash business. In fact, we are not expecting any significant Chinese business, if any, to come in the old crop season until January.
Market-moving fundamentals to watch on Friday will be the jobs report, the OPEC meeting and any trade developments with China.
March cotton closed was 78.02 cents, down 2.07 cents, July cotton 81.12 cents, down 1.66 cents and December 2019 finished 77.48 cents, down 0.89 cent. Thursday’s estimated volume was 33,200 contracts.