The cotton market finished slightly higher Tuesday, but not before it had zoomed some 1.5 cents higher earlier in the session. The inspiration for such a dynamic pop was an early morning tweet from President Trump, indicating he had talked with China’s President Xi confirming the two will meet at the G-20 meeting.
Mr. Trump indicated the talks will be “extensive” when the two leaders gather. Unfortunately, new crop December could not hold on to its gains and retreated to nearly unchanged levels.
Another thorn in the side of December cotton was the fact that spot July turned negative in the early afternoon. Spot July cotton will enter its delivery period on Monday of next week. Thus, all on-call cash contracts must be squared away by Friday’s close.
The Federal Reserve meets Wednesday and will decide its latest interest rate policy. It is expected the Fed will take no action. One reason is the ECB (European Union Central Bank) eased interest there, thereby causing the U.S. dollar to rally be default.
The market is also anticipating Thursday’s sales and export data. Last week, sales were less than robust with both Mexico and China canceling a small quantity of bales.
Tuesday July cotton closed at 65.31 cents, down 0.31 cent, December settled 66.82 cents, up 0.40 cent and March ended at 67.19 cents, up 0.32 cent. Estimated volume was 47,000 contracts.