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DTN Morning Cotton Commentary 11/10 07:51
Cotton Awaits WASDE Report
Cotton rises ahead of USDA report, inflation data and supply outlook.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is slightly higher Tuesday morning as it anticipates the
latest supply-demand update and new inflation numbers. Traders are also
watching the energy complex and weighing comments from certain Fed governors
about rate hikes in December.
Monday afternoon, USDA issued its crop progress report. It held that the
U.S. crop is 71% gathered versus the five-year average of 63%. Texas is 65%
harvest versus her five-year average of 55%.
Monday was the second day of five for Goldman Sachs, cotton's largest spec
long-only fund, to roll their Dec positions into March. March open interest
surpassed Dec open interest on Thursday. The December Contract continues to
lead in daily volume.
The Bureau of Labor Statistics released its October CPI (consumer inflation)
just now. The estimate called for 0.3% headline growth rate and 0.2% for core.
Tuesday 's actual numbers were 0.4% and 0.3% respectively.
At 12 p.m. EST Tuesday, USDA will issue its monthly supply-demand update.
The average trade guess calls for the U.S. 2026/27 cotton production to be
13.16 million bales, down from the 13.44 million bales estimated in October.
U.S. exports are estimated around 12.27 million bales versus 12.30 million,
ending stocks at 3.62 million bales versus 3.80 million last month. World
ending stocks are estimated at 70.41 million bales versus 70.68 million last
month. This would still be the lowest since 2011-2012.
Wednesday is Veterans Day with many agencies of the federal government
closed. However, U.S. commodities markets, including ICE Cotton, will trade a
normal day.
For Tuesday, close-in support for December Cotton stands at 78.00 cents and
77.85 cents, with resistance around 80.00 cents and 80.50 cents. This morning's
estimated volume is 26,370 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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