By admin       2019-02-05

The cotton market is lower Monday morning as speculators were left feeling disappointed by the U.S.-China trade talks last week. There was no real mention of cotton, although it is anticipated Chinese stocks are diminishing and the need to buy cotton on the open global market is becoming obvious.Based on that latter thinking, the cotton market rallied, marked by a well-defined trend-line off its January low of 70.65 cents. In fact, open interest had been on the rise, driven by bullish speculators sensing a Chinese deal was in the works. However, when the trade talks concluded with no real success, that trend was broken last week.The month of February offers little, if any, bullish support to the market. Chinese New Year’s starts tomorrow, with the U.S.-China trade talks to soon follow afterwards. Also, this Thursday, USDA will release another delayed export sales report.Interestingly, even without China in the mix, cumulative weekly sales for the week ending December 20 were 74.3% of the USDA’s original forecast. This compares to an average of 66.6% sold on the five-year average at this same time of year.On Friday, March cotton’s options will expire, but there will also be a combined January/February supply-demand report. The 2018 crop will likely see a reduction of sorts, which should lead to possibly lower domestic carryout. Still, there is not enough current bullish news to encourage big speculative buying.Support for March cotton is 72.25 cents and 71.70 cents, with resistance at 74.00 cents and 74.85 cents. Overnight volume stands at 9,300 traded.

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