The cotton market is lower Wednesday morning as the bearish trend is re-asserting itself. Typically from its spring highs, the market tends to seasonally trend lower into fall’s harvest. Given the potential huge crop, and lack of a Chinese trade deal, this season is no exception.
The big economic event today is the results of Federal Reserve’s Open Market Committee (FOMC) which began Tuesday morning and ends today. It’s widely believed the FOMC will lower U.S. interest rates by 0.25% today.
Global stock markets were mixed in quiet trading overnight. At mid-week the global financial markets are not as volatile as thus far there has been no retaliation after the weekend terrorist attack on Saudi oil fields. Still, traders are wondering if such another market-roiling event might come.
Overnight, President Trump warned the Chinese not to wait for the U.S. election before making a trade deal. Last week, he delayed implementation of tariffs of $250 billion on Chinese goods until October 15 as a good-will gesture. That act did cause the cotton market to rally, but void of any additional positive news, cotton prices have slipped back towards the 60-cent mark.
For today, support for December cotton stands at 60.25 cents and 59.45 cents, with resistance at 63.40 cents and 64.70 cents. Overnight estimated volume is 4,367 contracts.