By admin       2019-05-10

The cotton market has posted new lows as it senses the U.S.-China trade will collapse. Friday, the U.S. set to increase its tariffs on all Chinese imported goods to 25% at 12:01 a.m. Friday morning. China has said she will respond, but the Chinese delegation is in Washington to further advance the trade talks. Obviously, the financial and commodity markets are hoping for a last-minute agreement.USDA reported improved business for last week. Net sales for 2018-19 were 235,800 bales. That was up 63% from the previous week and 6% from the prior four-week average. Increases were reported for Turkey (78,800), Vietnam (56,400), India (26,900), Bangladesh (18,500), and China (16,900). Reductions were reported for Hong Kong (800), Japan (200), Malaysia (100), and Mexico (100).For 2019/2020, net sales of 56,500 RB were primarily for Mexico (24,300), China (19,800), and Thailand (11,900). Exports of 387,100 RB were up 32% from the previous week and 16% from the prior four-week average. Exports were primarily to Vietnam (131,100), China (51,800), Turkey (38,200), Pakistan (32,600), and India (29,100).Net sales of Pima totaling 2,100 RB were down 84% from the previous week and 88% from the prior four-week average. Increases were primarily for India (700), Pakistan (600), Bangladesh (300), and Vietnam (300). For 2019/2020, total net sales of 5,700 RB were for India.Exports of 16,600 RB were up 61% from the previous week and 24% from the prior four-week average. The destinations were China (9,300), India (3,400), Turkey (2,400), and Egypt (800).Friday, USDA will release its supply-demand data for May. Traders are anticipating greater U.S. production, but also a hike in exports. World carry is expected to slightly decline.May cotton expired Wednesday at 71.45 cents and front leader July has traded down to that price. Additionally, old crop July is trading discount to new crop December, a bearish signal for demand.For Thursday, support for July cotton is at 70.50 cents and 70.00 cents, while resistance will be about 73.00 cents and 74.00 cents. Overnight volume stands at 11,800 contracts.

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