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DTN Closing Cotton            05/28 13:44

   Cotton Lower on China Concerns

   The triple threat of the phase-one failings, the coronavirus and now the 
Hong Kong security law have combined to put pressure on the cotton market.

Keith Brown
DTN Contributing Cotton Analyst

   The triple threat of the phase-one failings, the coronavirus and now the 
Hong Kong security law have combined to put pressure on the cotton market. 
Ultimately, traders fear some sort of negative retaliation from the Beijing 
government. Already this week, China has purchased three to four cargoes of 
South American soybeans just so the U.S. will get the message. However, for 
their part, the Trump Administration is unrelenting in its frustration and 
anger towards China, and is forming some sort of total response.

   Friday morning USDA will issues its weekly export sales data. Traders will 
be watching for reduced purchases or outright cancellations by China. For 
several consecutive weeks, China has been the dominant buyer of U.S. cotton, 
but many think such buys could be a political ruse and will be cancelled later.

   Friday's round economic data proved to be pretty bearish. Weekly 
unemployment claims, durable goods and first quarter GDP numbers were decidedly 
bearish. Unfortunately, the marketplace can't know if the worst case is behind 
the country or more bearish economic fallout is destined to come.

   Heading into Friday, for the week, July cotton is down 0.04 cent, for the 
moment, it is 0.24 cent higher on the month, but for the year, it remains some 
13.00 cents down. 

   Thursday's session saw July cotton closed at 56.57 cents, down 0.77 cent, 
December ended at 57.54 cents, down 0.49 cent and March finished at 58.52 
cents, down 0.46 cent. Estimated volume was 18,555 contracts. 

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




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