May 29, 2020
By Keith Brown, DTN Contributing Cotton Analyst
Cotton Ends Month Flat
The cotton market overcame triple-digit losses Friday to close nearly flat.
The cotton market overcame triple-digit losses Friday to close nearly flat. Earlier in the session, fears over Trump’s China conference spooked traders and sent prices markedly lower. However, into the close, traders bought back their some short positions to square up their positions. July cotton was down 0.02 cent for the week and up 0.26 cent for the month.
The month of June will see July options expiring, fresh monthly supply-demand report and the huge acres report. It is the latter report thatwill carry tremendous importance for the 2020 season. Expectations call for reduced acres here, and no doubt globally. USDA has pegged U.S. carryout at 7.8 million bales, a 13-year high. Global inventories are pegged at 99.00 million bales.
Friday’s weekly export sales were way below the average for the last five weeks, but sales were still bullish and China was the dominate big buyer.
The technical trend of the market is attempting to turn positive. From its January Highs, prices tumbled over 25 cents per pound, taking the market very oversold as evidenced by technical indicators. However, bottom pickers and short-covering brought prices up about 10.00 cents. No question the month of June will be volatile and two-sided as the market weighs all of its fundamentals, especially those related to China.
For Friday, July cotton closed at 57.59 cents, up 0.02 cent, December ended at 57.48 cents, down 0.06 cent and March finished at 58.48 cents, down 0.04 cent. Estimated volume was 30,705 contracts.