Cotton is attempting to trade sideways ahead of this week’s Planted Acres Report from USDA and the highly anticipated Trump/Xi meeting scheduled in Japan at the G-20 meetings late this week. In fact, we are hearing that meeting may occur after markets close Friday.
The outcome of that meeting is uncertain, but it will have huge implications for global trade, one way or the other. President Trump has expressed the possibility of additional U.S. tariffs if no real progress occurs. At this stage, however, real progress may simply mean a resumption of the stalled talks.
USDA reported the 2019 crop is 96% planted versus last year’s 99%, against the 5-year average of 98% done. Condition-wise, the good/excellent category stands at 50% versus same time last year’s rate of 42% good/excellent.
Cotton’s 100-Day Trend remains steeply bearish, although its decline has slowed. Managed money speculators are heavily short, and thus far, have little technical or fundamental incentive to reverse their bearish course. However, on the cusp of the summer growing season certain crop calamities are bound to emerge. To that end, we understand other top-producing countries, specifically China, India, and Pakistan, are beginning to suffer crop downgrades.
Support for December Cotton today stands at 65.50 cents and 64.70 cents, with resistance at 67.00 cents and 67.95 cents. Overnight estimated volume is 2,780 contracts.