The cotton market is slightly lower Tuesday morning, reflecting its normal pace planting progress and stable condition numbers. Monday afternoon, USDA issued its weekly report which indicated the 2019 crop at 89% seeded, compared to last year’s level of 95%, and five-year planting pace of 94%.
Texas stands at 86% complete compared to last year’s 94%, while Georgia is 96%, ahead of its year-ago pace of 92% planted. The current condition of the nation’s crop is 49% good/excellent, compared to last week’s 44% standing and five-year average of 38% good/excellent.
The Federal Open Market Committee (FOMC) meeting begins Tuesday, and concludes Wednesday afternoon with an interest rate statement. Many traders believe the Fed will not raise interest rates at this particular meeting. In fact, belief is the FOMC may lean toward a more dovish stance on monetary policy. The U.S. dollar is up 150 points for the year.
Potential trouble with India’s 2019 crop is coming to the forefront. Currently, China is estimated to be running well over two weeks behind on normal monsoonal rains. The majority of India’s rainfall occurs between June and September, so even with U.S. domestic carryout expected to be above six million bales, there is enough crop uncertainty unfolding to provide some underlying support to the Futures.
For today, support for December cotton is 65.70 cents and 65.00 cents, with resistance at 69.70 cents and 70.10 cents. Overnight estimated volume is 5,484 contracts.