Cotton Remains Depressed

After posting a small recovery close Wednesday, the cotton market is right back lower Thursday morning. Participants continue to battle a very bearish technical trend, unmerciful short-selling by speculators, the on-going U.S. harvest, no government news, and tedious demand.

Traders are scrutinizing China’s latest expansion of rare earth export controls, which if implemented, would give her total control over the world’s supply chains. Some feel the Chinese proposal is merely part of a bargaining ploy to achieve greater concessions from the United States. It is still expected that President Trump will meet with China’s Xi Jinping in South Korea this month.

Crude oil jumped over one percent Thursday after President Trump said Indian Prime Minister Modi pledged to stop buying oil from Russia, which fills one-third of India’s energy needs. Still, between the US/China trade tensions and the IEA’s warning of a big surplus next year, Crude remains in a volatile two-sided trade.

Daily chart support for December cotton stands at 63.00 cents and 62.20 cents, with resistance at 63.00 cents and 65.00 cents. Thursday morning’s estimated volume is 6,450 contracts.

Keith Brown can be reached at commodityconsults@gmail.comor by calling (229) 890-7780.