The cotton market is trading lower as the coronavirus guidelines were extended to late May, and USDA’s planting intentions indicated too many 2020 acres.
To the former, just Tuesday President Trump gave a sobering talk indicated the next two to three weeks will be extraordinarily harsh, as the virus is expected to peak in the U.S. Some analysts are suggesting some 250,000 Americans may succumb to the virus.
To the latter point, it has been long anticipated 2020 acres would be greatly reduced given earlier industry survey results, and the decline in the price of new-crop cotton. However, 2020 acres intentions were less than 100,000 off from those of 2019. Additionally, given the potential for foreign mills to shutter, the bearishness of the cotton market is expanding.
Thursday, USDA will issue weekly exports sales. It will be interesting to see if there are any cancellations.
For Wednesday, support for May cotton is 48.80 cents, with resistance at 51.10 cents, and 52.40 cents. Overnight estimated volume stands at 6,429 contracts.