Rising Tariffs, Falling Cotton Prices

One had to dig deep this week to find positive news in the cotton market. Too, it could only be found in the markets double bottom technical support between 66 and 67 cents, basis the December contract.  Even at that, going into the weekly close that support was showing slight weakness.  Thus, the panic trading that occupied the market all week, while seeming to abate somewhat, remains a primary concern.  As one analyst put it, “I wonder if we could export more if we ga...
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Trade tensions drive down demand and prices

The weakening demand fears related to the U.S.-China tariff dispute as well as the resurgence in the world demand for Brazilian cotton led the New York ICE contract lower all week.  Going into the weekly close the December contract had lost 455 points on the week.  In fact, the market was lower during 9 of the past 11 trading sessions and lost 681 points, essentially losing SEVEN cents since it became evident that the tariff dispute was far from settled.  Most of this loss, i...
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Cotton Prices Dip Below 75 cents, Growers Worried

As was cautioned in last week’s newsletter cotton prices came under pressure all week and new crop December prices broke below the psychologically important 75 cent support level, giving a good victory to the market bears.  The long term support at 72.50 cents remains in place, but the psychological impact to the market was damaging.  Many growers view the 75 cent level as an absolute bare minimum breakeven point.  Weekly export sales and shipments were less than impres...
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Cotton Prices Inch Up, Plantings Expected to Decrease

Cotton futures relieved their seriously overbought conditions and charged ahead to near the prior week’s settlements.  Reasonably good export sales and shipments were positive for the market.  Too, continued speculative and fund buying across commodities based on the continued economic difficulty caused by the swine flu epidemic in China pushed prices higher.  However, bullish support also came Friday with the release of USDA’s March prospective plantings report. ...
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Cotton Prices Strengthen, but Remain Unstable

Cotton prices were influenced by the swine flu disaster in China and its spillover into all commodities.  The price rally continued higher as fund managers gave up their attempt to drag prices lower and the ensuing short covering sent the bears running for cover as they exited losing positions.  While the rally moved to 78 cents, basis there nearby May contract, it met rather stiff price resistance on an attempted move to 78.50 cents.  Holding above the 77.00-77.25 cent level is c...
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Cotton Locked in 71-75 cents Trading Range

Day after day after dark day, cotton continues to have a bad month.  Pretty soon, someone might even notice, you think?  Certainty, those with offices in Washington have not.  Old crop futures prices settled a few points higher with the May futures contract at 73.49 cents while the new crop December contract settled the week at 73.50.  Both contracts are working hard to reach the 75 cent level, but market fundamentals, led by that now infamous fundamental, government interfer...
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Cotton Prices Hover in Tight Trading Range

Cotton prices continue trapped in a very narrow trading range. This week, March has had a high of 7411 and a low of 7245 for a measly 166 points. That’s not to say the trading has been lackluster because volume has been quite large, but the activity has been limited mostly to the rolling of positions from March to May. March closed the week at 7255, down 109 points on the week.For the first time since December, USDA released another supply/demand estimate for folks to debate. The big globa...
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Cotton Remains Around 72 cts Awaiting US-China Deal

Cotton prices continue the wild swings through a measly 200 points, still trapped in the 73 to 75 cent range and still going almost nowhere until there appears to be a realistic break in the U.S.-China trade tiff.  Rumors persist that a soybean agreement is in the works, but nothing on cotton.  Many feel cotton does not have a supporter in the talks, but one would think any agreement on soybeans would also include a row crops. Thus, prices are still supported in the 72 cent area, ...
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Cotton Prices Strengthen on Re-Opening of US Gov't

As dull as the cotton market has been over the past month, news of a temporary end of the government shutdown has spurred interest in the market.  Likely, most of the excitement goes no deeper than just the idea that USDA’s role of collecting and disseminating data will again begin. Finally verifiable data about market fundamentals will be available to offer suggestions of market direction and speed of market price reaction.  While one should not assume the end of the shutdown is...
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Hope of US-China Trade Deal Supports Cotton Prices

Cotton futures flirted with 74 cents all week, basis the nearby March contract and climbed as high as 74.66 on Friday (Jan 18, 2019) trading.  The bulls pushed the market rumor that China was receptive to a trade package that included a long term annual one trillion dollar purchase of U.S. goods.  Such a package would eliminate the entire U.S. trade deficit with China by the end of the U.S. Administration’s second term, 2024.  Trade talk rumors and rumors of export sales con...
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