After a week of witnessing the Dow Jones unmercifully tank, the cotton market is unable to get friendly traction Friday morning. It is hard to imagine that a mere thirty days ago, spot cotton was trading near 72 cents. That price level quickly saw the signing of the Phase One agreement, followed by USMCA, but what a difference a virus makes. As it stands, cotton is now closer to moving under sixty cents than going over seventy cents. No question the market has been forced to abandon its own fundamentals, most of which is positive.
Despite solid export sales Thursday, May cotton fell some 4.5%. Cotton’s positive moment was bearishly covered by an unrelenting Dow Jones. Fears are if/as global infections surpass those of mainland China, the situation would hurt consumer confidence and curtail discretionary buying activity.
Cumulative cotton sales have reached 13.60 million bales, the largest amount for this time of the year since the 201/2011 season. Current season sales have reached 89% of USDA’s forecast versus the 5-year average of 85%.
March cotton remains in delivery. There were no deliveries Friday.