The cotton market saw some short-covering Thursday as Friday is the end of August. Often, certain traders, such as the managed money funds, will cover a proportion of their positions at the end of the month to dress up their trading books. Interestingly, the market sloughed off poor sales and exports report Thursday morning. In those numbers, weekly sales were down for the prior reporting period, and China was a net canceller of previous purchases.
Some defoliation is occurring across the Southeast, although weather from Hurricane Dorian may cause a momentary delay in those efforts. Along those lines, Monday’s weekly crop condition report will be delayed until Tuesday and Thursday’s exports-sales will be published Friday week. Also in the month of September there will be a key supply-demand report. It is initially expected USDA will lower the 2019 crop, but also exports. Thus, ending stocks may remain large.
The U.S. dollar remains in a stout bull market. Despite the fact the Federal Reserve has lowered interest rates, other nations are deliberate weakening their own currency with negative interest rates as a means to gain an export advantage.
Hopefully, September will see the U.S. and China get back to the negotiating table. As of Thursday, those meetings are being scheduled for Washington. The U.S.-China trade war will enter in the 15 month when the calendar turns next week.
For Thursday, December cotton closed at 59.00 cents, up 0.27 cent, March was at 59.65 cents, plus 0.23 cent and December 2020 was at 62.26 cents, up 0.22 cent. Thursday’s estimated volume was 19,700 contracts.