Friday morning the cotton market is higher as it tries to build a bullish case. Yet, the case for a higher market rests with friendly acres data, and a positive turn to the U.S.-China trade war. By Sunday night’s opening, it will know both.
Friday at 11:00 a.m. CDT, USDA will publish its 2019 Acres Report. The average estimate stands at 13.82 million, within a wide range of 13.5 to 14.30 million acres. For comparison, March’s Planting Intentions were 13.78 million. The sense of some traders is the actual number may be smaller, given a fair amount of acreage was either delayed in planting, or not planted at all.
Another big shoe to potentially drop will be Saturday’s Trump-Xi meeting. As it stands, it is anybody’s guess as to what may happen. The Chinese appear resolute, but the U.S. seems all the more determined to correct the trade imbalance.
As of June 20, cumulative sales stand at 25% of USDA’s forecast for the 2019/2020 marketing year. This number is not particularly slow considering the current trade fuss with China, and the height of the U.S. dollar.
For today, support for December cotton is 65.70 cents, while resistance stands at 69.70 cents. Overnight estimated volume is 2,645 contracts.