The cotton market finished the last day of May sharply lower. For the week, December Cotton was down 0.31 cent, and down over 8.50 cents for the month. Although, the market saw essentially supportive sales and exports data, the news of the potential Mexican tariffs proved to be psychologically heavy. Thus, amid a sharply lower Dow Jones, and the retreating Chicago grains, cotton was unwilling to rally alone.
Into the close Friday, the bearish speculators reasserted their bearish attitude, and the sell-off was fueled with a barrage of long liquidation and new short selling. Friday’s estimated volume was 30,400 contracts.
The market now enters the month of June with its plethora of potential market moving events. Not to rank any one in importance, but the July cotton option will expire, the July futures will enter delivery, there is a monthly supply-demand report from USDA, as well as Planted Acres, and the potentiality explosive G-20 meeting where Trump and Xi supposedly will meet to discuss trade.
Technically, the bearish trend of cotton reconfirmed itself Friday. For a session or two this week the market’s action appeared as if its short-term moving average would hook bullish, but obviously that change-in-direction move was rejected by trades.
Next week, USDA will return to its normal calendar if issuing its planting progress data on Monday, as weekly sales and exports on Thursdays. However, USDA will begin to its crop condition data the second week of June. It will be in that data, traders may see how the 2019 crop is suffering in many locales.
For Friday, July cotton settled at 68.08 cents, down 1.26 cent, December went out at 67.07 cents, down 1.25 cents and March was at 67.76 cents, off 1.20 cents.