The cotton market finished fractionally lower on Wednesday in one of its slowest trading sessions to date. Besides low volume, the high/low range was less than 1 cent. The market is essentially being held hostage by the on-going U.S./China trade talks. Traders have long been frustrated by the tedious talks, but of late have become even more tired of waiting for some positive news. Thus, Wednesday’s inaction of the ICE futures.
Thursday and Friday, USDA will release results of its annual agricultural conference. To our understanding, the data is historical projections and not the result of any actual producer survey. We have not seen any sort of cotton guesses, but we have seen the guesses for the grains. For beans, the outlook is for 86.10 million acres versus last year’s 89.1 million, and for corn the expectations are for 91.7 million compared to last year’s 89.1 million. Street talk has cotton acres higher, per the NCC membership survey in late January.
Also, Thursday is the last opportunity for producers to either fix cotton or roll forward their positions in time. Friday is the first delivery day for Spot March cotton. Also into Friday, there will be a huge catch-up report for all delayed sales and exports data. In addition, the market will be looking for any positive results — if there are any positive results — from the U.S./China trade talks.
May cotton settled Wednesday at 72.16 cents, down 0.03 cent, July finished at 73.34 cents, off 0.14 cent and December was at 73.09 cents, up 0.22 cent. Estimated volume Wednesday was 21,800 contracts traded.