After Tuesday’s devastating trade, which nearly took the market limit down, ICE futures are slightly higher this morning. Some short-covering and bargain buying is taking place. The market had been attempting to form a positive trading pattern on its charts, but heavy speculative selling crashed that formation, as well as all other support. In fact, the selling was so severe, the market fell into new life-of-contract lows. Volume was a hefty 57,000 contracts plus.
Traders will be keen on Federal Reserve Chairman Powell’s testimony to Congress today regarding interest rates. The Trump Administration has been calling for a rate reduction, but the most recent jobs data argues against that move. Analysts question if a measly quarter-point rate reduction would help the U.S. economy? Yesterday, Turkish President Erdogan fired the head of Turkey’s central bank, further cementing the U.S. dollar as the world’s go-to currency.
In other news, overnight China’s June consumer price index was up 2.7%, year-on-year, which was in line with market expectations. However, the food prices component of the report rose by 8.3% annually.
U.S.-China trade talks are happening in Beijing, with little movement reported. Despite some U.S. overtures, including a softer stance on the Hong Kong protests, the Chinese still want a lifting of all tariffs before a serious deal can get done.
A storm is forming in the Gulf of Mexico. The NWS suggests it will become a tropical depression by late week. Its current path is westward towards oil platforms and New Orleans.
For Wednesday, support for December cotton is 63.07 cents, with resistance at 64.80 cents and 65.45 cents. Overnight estimated volume is 7,145 contracts.