DTN Cotton Closing: Cotton Lower

Mature cotton rows ready for harvest. ©Debra L Ferguson

Cotton Lower on China Concerns

The triple threat of the phase-one failings, the coronavirus and now the Hong Kong security law have combined to put pressure on the cotton market.

The triple threat of the phase-one failings, the coronavirus and now the Hong Kong security law have combined to put pressure on the cotton market. Ultimately, traders fear some sort of negative retaliation from the Beijing government. Already this week, China has purchased three to four cargoes of South American soybeans just so the U.S. will get the message. However, for their part, the Trump Administration is unrelenting in its frustration and anger towards China, and is forming some sort of total response.

Friday morning USDA will issues its weekly export sales data. Traders will be watching for reduced purchases or outright cancellations by China. For several consecutive weeks, China has been the dominant buyer of U.S. cotton, but many think such buys could be a political ruse and will be cancelled later.

Friday’s round economic data proved to be pretty bearish. Weekly unemployment claims, durable goods and first quarter GDP numbers were decidedly bearish. Unfortunately, the marketplace can’t know if the worst case is behind the country or more bearish economic fallout is destined to come.

Heading into Friday, for the week, July cotton is down 0.04 cent, for the moment, it is 0.24 cent higher on the month, but for the year, it remains some 13.00 cents down.

Thursday’s session saw July cotton closed at 56.57 cents, down 0.77 cent, December ended at 57.54 cents, down 0.49 cent and March finished at 58.52 cents, down 0.46 cent. Estimated volume was 18,555 contracts.

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