The cotton market is starting a new year but brought over its old problems. The greatest of these bearish situations has to be the U.S./China trade war. As it stands, we are being publicly told great progress is being made between the world’s two largest economics, but as the old saying goes, “no money has hit the table.” We understand a U.S. trade delegation departs from Washington to China Jan. 7 to hopefully cement a deal. The talks are operating a self-imposed deadline of March 1.
Other bearish factors for cotton include the current U.S. government shutdown. It is choking off certain vital market information from USDA. Already, the market has missed last week’s sales and exports information as well as the trading data form the CFTC. This Friday’s sales report is in jeopardy of being cancelled, and beyond that, next week is the crucial monthly supply-demand report.
However, given its deep oversold state, the cotton market is slightly higher Wednesday, on very small volume. Apparently, some traders are hoping for a positive outcome in those aforementioned trade talks. Still, the cotton trade is in a fragile state.
Close-in support for March cotton is 71.85 cents, with resistance at 73.60 cents and 74.18 cents.Keith Brown can be reached at email@example.com