The cotton market closed slightly higher Tuesday as unofficial sources disclosed the U.S. and Chinese trade negotiators will meet next week, ahead of the congressional recess of August 1. Despite the potential for a meeting, China is still wanting all U.S. tariffs to be lifted before any serious talks can happen.
The higher market on Tuesday somewhat defied the bearish crop condition data from Monday. USDA upped the nation’s crop four percentage points to 60% good to excellent. Texas, the top producing state, was rated at 58% good to excellent, with the second biggest producer, Georgia, at 60% good to excellent.
Technically, the market’s trend is severely bearish, although the market is above last Friday’s big turnaround. That particular rally was a 2% jump on strong volume. However, speculators hold a record net-short position despite the fact the market is already so bearishly saturated.
Thursday will see another round of weekly sales and exports. As the 2018-19 season concludes, it will be interesting to see if unfilled sell orders are forwarded into the new crop season or simply cancelled.
December cotton settled at 63.73 cents, up 0.37 cent, March was 64.52 cents, up 0.37 cent and December 2020 closed at 65.98 cents, up 0.31 cent. Estimated volume was 15,600 contracts.