COTTON

December Cotton was slightly higher overnight following Friday’s selloff in the wake of the disappointing jobs report. It didn’t help that the US announced sharp tariff increases set to begin August 6, which could discourage global demand and also put the US cotton exports at a disadvantage to Brazil. 

The dollar also rallied sharply on Friday, which makes US exports less competitively priced on the global market. All of those factors have moderated slightly overnight, which has allowed cotton to recover a bit. 

The US crop is in good shape, but conditions may show a slight decline this week following dry weather in Texas last week. World Weather Service says unirrigated West Texas has seen some drying in the past week and that cotton areas still need greater rain and some additional warm weather to support “the best” dryland production. Other areas in Texas are seeing highly varying weather and soil conditions. Timely rain will become increasingly important in the next two weeks. 

South Texas crops are maturing and beginning to be harvested. Delta crops are drying down, but it looks as though timely rain may evolve during the coming week to ten days. The southeastern U.S. cotton areas in the nation are also expected to receive periodic rain with some of that moderate to heavy this week.