The cotton market finished strong Tuesday amid strong supply/demand data from USDA. The government cut the U.S. crop some 600,000 bales, which resulted in domestic ending stocks dropping to 5.50 million bales. It’s the second consecutive month the government slashed the crop with six-digit production losses. The 2019 crop now stands at 20.20 million bales. The agency also substantially lowered foreign production in India and Pakistan. The final result was global carry fell to 80.20 million bales a 500,000 bales reduction.
The market now awaits Thursday’s weekly sales and exports data. Last week’s data was off, but sales are still exceeding its five-year average for this time of year.
The Federal Reserve Governors are meeting Tuesday to discuss monetary policy. They will announce their new stance on interest rates Wednesday at 2 p.m. The Fed is expected to make no change.
This Sunday President is expected to decide on implementing additional tariffs on China or not. The Dec. 15 date has been long scheduled for some time, but hopes are if a trade deal can happen, he will not follow through.
For Tuesday, March cotton ended at 65.93 cents, up 0.55 cent, July closed at 67.59 cents, up 0.52 cent and December 2020 finished at 67.79 cents, up 0.49 cent. Estimated volume was 25,692 contracts.