Cotton Up on Possible Trade Deals

The cotton market is somewhat higher today, along with its row crop sisters of corn, beans and wheat, as it is anticipating a strong trade deal with China. Currently, President Trump is cruising across Asia visiting various countries and securing trade agreements. China, of course, is the main prize.

The Federal Reserve meets today and will announce its monetary policy tomorrow at 2 p.m. EDT. Traders are anticipating a reduction of one-quarter point in interest rates.

The U.S. government shutdown stands at day 28. This weekend, being the first of the month, could see disruption in various social support programs such as SNAP. Thus, pressure is mounting on the Democrats to “make the vote.”

For South American weather prospects, a front moved into southern areas of Brazil, with scattered showers and some heavy rain. The front will migrate into central Brazil this week and restart showers after a week of dryness. Producers did not make as much progress on new crop plantings last week, due to dryness. Producers are worried about soil moisture for germination and early growth. Another front will move through this weekend into next week, which looks like it may be more beneficial for bringing widespread showers. For Argentina, a front brought some areas of heavy rain to the country late last week, filling in some areas that were a little dry. Some showers are forecast early this week, but another front is forecast to bring through some widespread rainfall this weekend.

Daily chart support for December cotton stands at 64.10 cents and 63.80 cents, with resistance at 65.50 cents and 66.00 cents. Tuesday morning’s estimated volume is 5,524 contracts.

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