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DTN Morning Cotton Commentary 01/02 07:36
Cotton Calmly Sideways to Start Year
The cotton market is starting the new year on a slightly higher-to-sideways
note.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is starting the new year on a slightly higher-to-sideways
note. But, ahead of what is considered still a holiday weekend, one shouldn't
read too much into it. Traders are awaiting the last of the shutdown's catch-up
news as well as the USDA's final numbers for the 2025 crop.
The CFTC issued an updated Commitments of Traders report for the time period
of Dec. 23. The data showed managed-money funds net bought in some 4,300
contracts, reducing their net-short position to 50,446 contracts. For context,
their original bearish carry slightly exceeded 81,000 positions.
USDA will issue its next export sales report Monday at 8:30 a.m. EST. Its
last export sales for the week ended Dec. 18, showed sales of 182,680 bales.
The previous release had sales of nearly 320,000 bales. Cumulative sales stand
at 57% of the USDA forecast versus a five-year average of 73% for this point in
the marketing year. The largest buyer last week was Vietnam (89,673 bales),
followed by Pakistan (29,514). Shipments totaled 146,915 bales, up from 134,371
the previous week. and the highest since Oct. 23.
USDA will issue its January WASDE on the 12th. Supposedly, the tabulators
will offer final 2025 production numbers in their data.
Crude oil is somewhat steady this first day of 2026, after registering its
biggest annual loss since 2020. Traders remain concerned with oversupply, as
well as geopolitical risks associated with Ukraine and Venezuela.
The U.S. dollar is making a slightly positive start to 2026. The Greenback
struggled mightily against most currencies last year, as traders awaited U.S.
economic data to predict interest rate moves this year. Worries about the U.S.
fiscal deficit, a global trade war, and concern about Federal Reserve
independence took a toll on the Greenback, and those issues are likely to
linger into 2026.
Daily chart support for March cotton stands at 64.00 cents and 63.50 cents,
with resistance hovering about 65.00 cents and 65.45 cents. Monday morning's
estimated opening volume is 5,560 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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