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DTN Morning Cotton Commentary 01/09 07:16
Cotton Recovers
After its late-session spill of Thursday, overnight the cotton market is
trying to regain its poise.
Keith Brown
DTN Contributing Cotton Analyst
After its late-session spill of Thursday, overnight the cotton market is
trying to regain its poise. The market may be influenced by the sharply higher
metals as well as anticipating the next few events and reports to be released
between Friday and Monday.
Friday, the U.S. Supreme Court is expected to rule on the legality of the
Trump administration's sweeping global tariffs. The challenge to Trump's
tariffs is among the most closely watched of the cases awaiting decisions by
the court. Its decision could impact the global economy and as well as being a
major test of presidential powers.
The Labor Department will release its monthly jobs report Friday morning.
The U.S. labor market likely showed modest improvement in December, providing
some encouragement for the year ahead but nothing to get too excited about.
Nonfarm payroll estimates call for an increase of 73,000 jobs, with the
unemployment rate edging lower to 4.5%. Most economists see a labor market far
from stellar but at least stable.
Also Friday at 3:30 p.m. EST, the CFTC will issue its scheduled (current)
Commitments of Traders information. At last count, the managed-money funds were
net-short some 49,000 bales.
Monday, USDA will issue its monthly supply-demand update. The average trade
expectation for 2025 cotton production is at 14.20 million bales, virtually
unchanged from the December number. Exports are expected at 12.04 million
bales, and ending stocks are expected at 4.56 million, slightly higher than the
previous number. World production is looking to be 119.46 million bales,
slightly off, with global ending stocks at 75.62 million bales, fractionally
lower.
Chart support for March cotton stands at 64.25 cents and 63.60 cents, with
resistance hovering about 65.00 cents and 65.75 cents. Friday morning's
estimated opening volume is 8,305 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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