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DTN Morning Cotton Commentary 03/02 07:18
Cotton Lower on War Jitters
The weekend's Iran news has more traders stepping back, taking a
wait-and-see moment.
Keith Brown
DTN Contributing Cotton Analyst
The weekend's Iran news has more traders stepping back, taking a
wait-and-see moment. Obviously, the wild gyrations of certain outside markets
have the cotton market in more of a cautionary mode. Yet, Monday marks the
beginning of the spring seasonal, which typically brings higher prices.
Last Friday, the CFTC updated its weekly Commitments of Traders data.
Managed-money funds had net-bought some 14,000 contracts. That action reduced
their current bearish position to 65,368 contracts from their previous carry of
79,508. Their record high negative carry, from last October, stands at 81,343
contracts.
The U.S. dollar is sharply higher Monday in something of a flight-to-quality
response to the Iranian situation. The shock-and-awe of the U.S. military is
underscoring that buying.
Spot March cotton saw zero delivery notices Monday. Thus far some 504
delivery tenders have been issued. The delivery period runs through Monday,
March 9.
Crude oil prices jumped more than 7% Monday, as traders fear the Iranian
situation could get out of control. Iran is the fourth-largest oil producer in
OPEC and crude oil will ultimately react to how the war unfolds. The top fear
is a prolonged disruption of shipping traffic through the Strait of Hormuz.
Chart support for July cotton stands at 66.20 cents and 65.80 cents, with
resistance around 68.00 cents and 68.25 cents. Monday morning's estimated
volume is 21,824 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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