The cotton market is moderately higher Wednesday morning after its bearish close Tuesday. Late in Tuesday’s session, in an act of Turnaround Tuesday, the market posted lows right into the waning seconds of the trade. In fact, a bit of chart damage was done, which it is trying to repair.
European markets were essentially muted overnight despite the UK Parliament’s no vote concerning Prime Minster’s Theresa May plan to have the UK leave he European Union. The rejection leaves her facing a no-confidence vote. May is expected to survive that vote however. To that end, the U.S. dollar is higher, and strangely, so is the British Pound.
Cotton Grower’s annual acres survey indicated U.S. producers will attempt another huge crop for 2019. The survey estimate was 13.6 million acres compared to last season’s 14.05 million acres. Interestingly, the poll indicated acres in Texas will be down, but acres in the Delta will be hugely higher. Of course, given this area yields more cotton per pound than does Texas, the 2019 crop may be excessively large. Still it is a long way from planting to gathering.
The market is still without information from USDA as the government shutdown remains in force. Additionally, the U.S.-China trade talks do not resume until the end of the month. Under such uncertainty, sellers may be more abundant than buyers in the coming days.
For today, support for March cotton is 71.90 cents, while resistance is found at 74.00 cents and 74.95 cents.