By admin       2019-05-13

The cotton market staged a sharp rally last night only to retreat back to unchanged to lower levels Friday morning. New U.S. tariffs went into force at 12:01 a.m. EDT Friday, with China threatening retaliation. Then on Friday morning, President Trump tweeted out something to the effect there is no rush for an immediate China deal. We don’t know how to process that statement, as we thought the talks carried an element of urgency. Anyway, the Dow Jones didn’t like it. It fell 100 points. Yet, as long as the two sides are talking, there is hope for a deal.Friday at 11 a.m. CDT, USDA will release its latest supply-demand data. The market is expecting higher U.S. production, higher U.S. exports, but higher U.S. carryout. For the world, traders see a slight decline in global carryout. To that end, there seems to be production problems in India, and more recently, there is rumored an ever-widening infestation of fall armyworms are eating up China’s crops. Both of these stories indeed bear watching.The Labor Department reported consumer prices rose in April. However, underlying inflation remained muted, which suggests the Federal Reserve could keep interest rates steady. The CPI increased 0.3% last month, lifted by rising gasoline, rents, and health-care costs. The CPI gained 0.4% in March. The U.S. dollar slightly fell on this news.The cotton market will have the weekend to digest wherever news comes of the U.S.-China trade talks. In fact, some see the trade talks turning into a trade war. Also, Monday we will see how the planting of the 2019 crop is progressing via USDA’s report.For Friday, support for July cotton is 70.00 cents and 69.50 cents, with resistance at 69.50 cents and 68.00 cents. Overnight estimated volume stands at 8,280 contracts.

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