By Keith Brown DTN Cotton Contributing Analyst
October 18, 2018
December cotton was slightly higher Thursday even though weekly sales and exports were negligible. Thursday morning we reported that current crop sales were 32,700 bales sold, which was down 67% from the previous week. Additionally, China cancelled about 15,000 bales to boot. That news, and the fact the Chinese stock market hit a four-year low last night, kept cotton prices under pressure all day.
Late in the session, some buying emerged as speculators covered short positions. with every passing day, the market is still trying to sort out the intense trials and troubles Hurricane Michael wrought upon the Southeastern crop.
It was about one week ago that Michael, a Cat-5 hurricane, pounded the Florida Panhandle and subsequently the Georgia/Alabama cotton belt. Despite the massive losses to the area crop, the cotton market is being undermined by low demand.
In other news, the U.S. dollar continued its upward move as fallout from the Saudi Arabia assassination situation, and rising interest rates, encouraged traders to flock to the dollar. As it stands, the U.S. dollar index is threatening to post new monthly highs. Of course, a strong dollar is always an impediment to U.S. agricultural exports. The Federal Reserve plans to increase rates again in December.
December cotton settled at $0.7805, up 13 points, March was $0.7949, up 5 points, and Red December ended at $0.6862, down 8 points. Thursday’s estimated volume was 22,200 contracts traded. (Source: Agfax.com)