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DTN Morning Cotton Commentary 04/24 07:13
Cotton Folds on Friday
The cotton market is somewhat lower Friday as traders are seeking to either
square or flatten certain positions.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is somewhat lower Friday as traders are seeking to either
square or flatten certain positions. The ICE futures have been on a wild,
upside tear for nearly seven weeks, without any sort of correction. Thus,
today's Friday retreat seems to be a normal response. Still, traders will
assess the CFTC's update, May cotton's delivery, weather forecasts, and the
geopolitical situation unfolding in the Middle East.
First notice day for the May contract is Friday, with any notice being
issued post close. Its delivery period runs through May 6.
Also, Friday at 3:30 p.m. EDT, the CFTC will update its Commitments of
Traders standings. Last week, for the first time in some two years, the
managed-money funds had reversed to a net-long position. Currently, they are
net-long some 16,000 contracts.
The Climate Prediction Center has upped its drought reading for the U.S.
Cotton Belt from 97% to 98%. Clearly, U.S. cotton growers are facing a massive
generational drought of Biblical portions. With that, the 6- to 10-day map
(April 29 to May 3) shows below-normal temperatures for Texas, somewhat normal
readings for the U.S. Delta, but above-normal for the Southeast. Rainwise,
Texas looks to have normal to slightly above normal odds, the Delta and the
Southeast with slight changes, with specifically greater opportunities for
Georgia.
Chart support for July cotton stands at 78.45 cents and 77.55 cents, with
resistance around 81.10 cents and 82.00 cents. Friday morning's estimated
volume is 11,310 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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