Source: Agfax.com

By Keith Brown DTN Cotton Correspondent
August 20, 2019

The cotton market was slightly lower Tuesday, leaving some traders to describe it as a failed Turnaround Tuesday. This longstanding phenomenon suggests, time in and time out, Tuesday’s trade is typically opposite of that of the preceding Monday. However, Tuesday was not the case despite Monday’s sharply lower session.

One reason for Tuesday’s retreat was there seems to be no fresh and friendly news for traders to digest. It has been extraordinarily hot and dry in Texas, with similar conditions stretching across other states of the cotton belt, but apparently it is demand that drives the market.

This Thursday, USDA will issue its weekly sales and exports data, and given the recent increase in the government’s target, the market will want to see evidence of that business unfold. Last week’s combined crop year total was 329,100 bales.

To our understanding, the merchant community has long been rebuffed the original idea of a 17.0 million bale export number, so the idea of a 17.20 million bale target is being viewed with skeptical eyes. To that point, the U.S. dollar has been on an upside tear of late, as other countries are deliberately devaluing their own currencies in order to obtain an export advantage.

For Tuesday, December cotton closed at 59.14 cents, down 0.10 cent, March ended at 60.08 cents, up 0.03 cent, and December 2020 finished at 63.09 cents, down 0.01 cent. Tuesday’s estimated volume was 19,700 contracts traded. (Source: Agfax.com)