Cotton Ratings Increase, Trade Lower to Start the WeekPosted 07/03/2018 8:53AM CT |
December cotton started the shortened trading week lower after seeing choppy sideways trade last week. The market traded down 1.4 cents to 83.04 after trading up to a high on the day of 85.09. Trade tension and an increase in the US dollar has been much of the driving force lower. Although forecasts of higher temperatures and little to no rain across key growing regions in west Texas should provide support for the market, the cotton conditions report showed Texas cotton rated good to excellent up 3% from last week. The overall cotton crop came in at 43% good/excellent vs the 10-year average for this time of 49%. The market is also at risk to see some long liquidation with Friday’s COT report still showing a large net long position. Momentum studies are oversold but with improving crop conditions and increasing uncertainty with trade tariffs the market could see a continuation of the trend lower. Resistance is around 85.07 with support at 82.86 and then down around 80.00.
Cotton Dec ’18 Daily Chart