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DTN Closing Cotton            12/13 13:46

   Cotton Lower on sluggish Sales, Exports

   In the Thursday morning comments we suggested we were confused by USDA's 
weekly report with all of its switching about of cotton sales from China to 
other countries.


By Keith Brown
DTN Cotton Contributing Analyst

   

   In the Thursday morning comments we suggested we were confused by USDA's 
weekly report with all of its switching about of cotton sales from China to 
other countries. In fact, a couple of subscribers called in to take us to task 
for our admittance. Yet, the market must have been confused as well, as it sold 
off nearly 1.00 cent Thursday. Altogether by session's end, the market had 
somewhat pared its losses. Pretty much an accepted trading principle is the 
market -- actually any market for that matter -- disdains uncertainty and 
virtually always takes the bearish slant. 

   Apparently, we have a new farm bill. Last night the House overwhelmingly 
voted to pass the legislation and just ahead of the possible government 
shutdown. Vaguely speaking, there were a host of tweaks and adjustments to all 
sections, so we advise subscribers to visit the NCC website for summary 
details. 

   The market remains mired in sideways congestion to say the least. To drive 
that point home, one need only to look at the 36-day moving average which 
stands at 79.35 cents. The March market settled Thursday at 79.41 cents. 

   Simply put, when one averages the last 36 closings, the market is sitting on 
top of those prices. Although, we believe the 2018 harvest low is in, the 
market is definitely in need of fresh, bullish news to catapult it higher. We 
have been saying for weeks that "new news" should come in the form of a deal 
with China. However, China bought soybeans last night and they dropped 12 
cents. So, somewhat tongue-in-cheek, we're not sure if we want China to buy 
cotton. However, there is a big difference between her buying a slug of cotton 
in the short-run and having a long-term trade relationship, the latter is quite 
bullish to the health of the market.

   March cotton settled 79.41 cents, down 0.56 cent, July was 81.02 cents, down 
0.53 cent and December 2019 finished 77.43 cents, off 0.30 cent. Thursday's 
estimated volume was 21,400.  

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


(BE)

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