Despite Tuesday’s tiny twenty-four point higher close, plus a stronger Dow Jones, the cotton market cannot get any sort of chart footing. Speculators continue to sell all inter-day rallies as the theoretic of the trade war intensifies.
Besides the new ten percent levy on Chinese goods, the U.S. Treasury has now accused China of being a currency manipulator. Just this week, China deliberately lowered her Yuan in an effort to stimulate her own exports to other countries. As far as we know, the two sides are expected to meet again in September. However, many market watchers are asking what for?
Thursday, USDA will issue new sales and exports data. This will be the first time new crop sales will be on their own. Last week was the last week reporting of old crop business.
Next Tuesday, USDA will issue its big monthly supply-demand data. Some analysts are looking for the 2019 crop to increase. Last month, the crop was pegged at 22 million bales, a fourteen year high. If the government indeed raise the crop, look for ending stocks to dramatically jump as well.
For today, support for December cotton stands at 57.26 cents, this week’s low. Resistance will be at 59.45 cents and 61.35 cents. Overnight estimated volume is 3,245 contracts.