Poor crop conditions this past weekend could not overcome the bearish sentiment and outlook for the cotton market Monday. Thus, Sunday night’s beginning saw December cotton put its daily high on the opening, and from that moment, it was all technically downhill.
There was one midmorning attempt to rally, but that comeback failed because there was not enough bullish conviction to keep the bulls charging, and to scatter the bears. Additionally, there was no movement this weekend on the U.S.-China trade war front. Of late, President Trump has somewhat tied the success for any trade deal with China’s to her ultimate handling of the Hong Kong protests.
Monday afternoon, USDA will issue its latest crop condition data. In recent weeks, the government has backed off on the good-to-excellent ratings for Texas. In fact, it just lowered that upper end category 13 percentage points, and it is anticipated it will happen again Monday.
Another key report will be this week’s weekly sales and export report. Last week saw a combined sales number for both crop years totaling some 329,100 bales. To reach USDA’s projected target, sales will need to average 161,000 bales per week. Cumulative sales for the 2019-20 season stand at 48%, compared to the five-year average of 41% for this time of year.
For Monday, December cotton closed at 59.24 cents, down 0.89 cent, March was 60.05 cents, off 0.67 cent, and December 2020 was 63.10 cents, down 0.20 cent. Monday’s estimated volume was a slack 16,397 contracts.