The cotton market is slightly lower Wednesday after its triple-digit higher close of yesterday. The news the Trump administration was delaying some exports duties on certain imported Chinese goods was seen as a real positive.
However, the market fell short of closing over the psychological level of sixty cents, so overnight some technical selling has emerged. Additionally, comments from Commerce Secretary Wilbur Ross this morning suggesting the September 1 tariffs would be implemented as planned is deflating bullish attitudes as well.
Tomorrow, USDA will issues its latest sales and exports data. With the recent increase in its exports target of 17.20 million, we feel the market needs to see some immediate evidence that such an increase is warranted.
Currently, weather remains a top concern for the crop’s development. Much of the cotton belt is experiencing severe heat and dryness. Some areas are seeing the local crop take a step back, which suggests Monday’s crop condition data will show reductions in the good/excellent categories.
For today, close-in support for December cotton stands at 58.10 cents and 57.90 cents, with resistance at 60.00 cents and 60.50 cents. Overnight estimated volume is 6.048 contracts.