DTN Cotton Open: Recovering from Wild Week

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The cotton market is higher Friday morning after enduring a wild week. Sunday night’s bullish hopes were dashed mid-week, only to see renewed optimism today. Fresh comments this morning from the White House and China suggests current trade meetings are going well.

The jobs data reported this morning showed only a 155,000 jobs were created during November. This was less than expected and lower than October’s strong monthly number of 250,000. The implication is a weak jobs situation means less action by the Federal Reserve. Thus, the general marketplace may be dialing in fewer interest rate hikes. This expectation has the U.S. dollar falling.

USDA reported weaker cash cotton business. Net sales for 2018/2019 were 94,500 bales. This amount was down 45% weekly and 31% on the four-week pace. Top buyers included Vietnam (31,900), Bangladesh (28,300), Malaysia (16,700) and Turkey (10,400). China did cancel some 30,000 bales. For 2019/202 net sales were 80,500 bales.

Top buyers were Malaysia (47,000), China (28,200), and Thailand (4,800). Exports were 158,500 bales, which was up 25% weekly and 175 on the monthly pace. Weekly shipments were to Vietnam (41,500), Mexico (41,500), China (14,200) Indonesia (11,300), and South Korea (10,300).

On the last day of the OPEC meeting in Vienna, it appears a cut of production is forthcoming. The member nations have basically agreed to an 800,000 barrel per day reduction, with non-member Russia contributing a 200,000 barrel per day cut.

Next week USDA will report on its latest supply-demand data. That information stands to be a real market mover. Estimates will be provided on Monday.

For today, close-in support today for March Cotton is 79.00 cents, with resistance at 80.16 cents and 80.80 cents.

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