The market pushed lower Friday, hamstrung by its ongoing bearish trend and two presidential tweets which added to the existing negative sentiment. Cotton was already under pressure from its dismal weekly sales and exports data of Thursday, when Trump referenced China’s President Xi as “the enemy” and in another tweet, indicated U.S. companies should seek “alternatives” to China. Neither one of those communication blasts were encouraging about agreeing to a trade deal.
His tweets came about after China announced it would place new tariffs on $75 billion of imported U.S. goods, including autos. All that news combined sent the financial and commodities markets sharply lower.
India’s monsoon rains are above average for the fourth consecutive week. Monsoonal rains are crucial to farm output and economic growth as India’s agriculture accounts for about 15% of India’s $2.5 trillion economy. Finally, India has received 10% more rainfall than the 50-year average in the week ended Aug. 2. Prior to that, India was running below that 50-year average. To date, India has received 2% more rain than average since the start of the monsoon season on June 1.
Next week, the market will look at crop condition numbers Monday and weekly sales and exports on Thursday. Incredibly, there may be some early planted fields in Georgia which will defoliate post Labor Day Weekend.
For the week, December cotton was down 125 points, and for the month, it’s off 192 points. Today, December cotton settled at 58.21 cents, off .73, March finished at 59.15 cents, down .71, and December 2020 closed at 62.49 cents, down .28. Friday’s estimated volume was 21,200 contracts.