The cotton market has traded both side of Friday’s lower close, as it weighs several recent events. On Friday, USDA released its long-awaited supply-demand data for January and February. The bottom line was a reduction to the 2018 crop by some 200,000 bales, causing domestic ending stocks to fall 100,000 bales. Currently, they stand at 4.3 million bales.
In the world data, USDA increased global carryout by 2-million plus bales to 75.50 million bales. Then on Saturday, the National Council released its member survey for 2019 acres. The results of that poll showed an increase for plantings, totaling 14.50 million acres. Potentially, allowing for 10% abandonment and nearly unchanged yields from 2018, total production looks to be 22.70 million bales for 2019.
This compares to USDA’s Friday’s crop data, which pegged the 2018 crop at 18.40 million bales.
This week, negotiators from the U.S. and China are expected to renew trade talks. The U.S. has declared a deadline of March 1 for a deal to be structured, less additional sanctions on all imported Chinese goods coming to America will increase.
This Friday, may see another U.S. government shutdown. As of now Republicans and Democrats are at odds about border wall funding. President Trump has long announced unless funding is available, he will again closed the government.
Currently, overnight estimated is 8,120 contracts traded. Support for March cotton is 72.20 cents and 71.55 cents, with resistance at 73.13 cents and 74.04 cents.