Cotton finished with double-digit losses Tuesday as several bearish economic reports upended the financial markets. First came the news on Monday that China’s economic growth rate in 2018 was pegged at 6.6%, which is the lowest level in 29 years.
Then came a warning from the International Monetary fund (IMF) suggesting the world was headed for a major global recession if the U.S. and China fail to resolve their trade differences. To that end, news emerged that the U.S. canceled a “preliminary planning meeting” with China this week.
The Chinese wanted to send a delegation to work on the agenda for next week’s major meeting, but due to the lack of progress, U.S. officials canceled it. However, as of now, the “real” meeting of Jan. 30/31 is still a go.
Still, in the face of such economic headwinds, the general mood of traders was next week’s meetings would produce very little progress. Thus cotton, as well as most of the Chicago grains, crude oil, and the Dow Jones, bent sharply lower.
The World Economic Forum is being held this week in Davos, Switzerland. The economic and political movers and shakers of the world are there, but the U.S. did not attend due to the government shutdown.
More on Cotton
For the fifth week, the cotton market will be denied marketing data from USDA. The two sides of the government shutdown are not even remotely close to a solution. It is hoped a resolution will be done by the president’s State of the Union next Tuesday, if that happens.
March settled at 7314, down 75; July was 7585, down 74; and December was 7419, off 58. Tuesday’s estimated volume was 28,200 contracts traded.