The cotton market is experiencing follow-through selling from Monday’s decline. The market is attempting to correct an overbought situation caused by too many speculators piling in on the long side. Some scattered rains did fall overnight across northern Texas, but as they stand, both the 6-10 and 8-14 day outlooks predominantly call for above normal temperatures and below normal rainfall in their forecasts.
USDA reported improving numbers in its weekly condition data. As of July 12, the national crop moved to 44% good/excellent, up from the previous 43%. Georgia stands at 75% good/excellent and Arkansas looks to be 80% good/excellent. The lower category for Texas, the very poor to poor, jumped from last week’s 36% to the present reading of 41% very poor/poor.
Overnight, China reported her imports of U.S. goods increased some 11% in the month of June, year on year. The month of May saw a 13.5% decline in such imports. China’s exports to the U.S. rose 1.4% in the period, versus a 1.3% drop in May.
Chinese imports from the rest of the world were up 2.7% in June, year on year, following a drop of 16.7% in May. China’s overall exports were up 0.5% in June versus a 3.3% drop in May. These trade results exceeded most analysts’ expectations, which suggest China’s economic recovery from the coronavirus is unfolding faster than most thought possible.
For Tuesday, support for December cotton lies at 62.60 cents and 61.20 cents, with resistance at 64.90 cents. Current estimated volume is 4,200 contracts.