By admin       2018-07-07

At this time, we expect US production and exports for 2018/19 to be projected significantly lower Vs June, with the reduction in production expected to be significantly greater than that for exports, resulting in a significant reduction in projected domestic ending stocks; ditto for the aggregate world balance sheet. The aforementioned tension over US/China trade relations is anything but a clear and well-defined phenomenon. On the domestic front, the President’s propensity for hyperbolic rhetoric and chaos make it difficult, if not impossible to base predictions on the behavior of previous US administrations and Chinese reactions. Simultaneously, the interconnections of the US and Chinese economies make it far more difficult to analyze any single commodity or tariff as an isolated phenomenon. Between the necessity of US consumer demand for Chinese textiles and the increasing Chinese reliance on yarn spun in Vietnam and Bangladesh, trade substitution could potentially offset the impact of direct tariffs on raw cotton.Producers looking at a market 10-plus cents below mid-June levels may understandably find this small comfort, and that is entirely understandable. But supply and demand do eventually trump other concerns, and we believe both the domestic and world supply situations are bullish in the long term. For next week, the standard weekly technical analysis for and money flow into the Dec contract are bearish. However, it will likely be the WASDE report and further US/China trade developments that move the market by the greatest magnitude next week. Too, at this point of the growing season, weather is always a potential factor.

Download App

# #

Member Login