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DTN Morning Cotton Commentary 07/01 07:38
Cotton Lower Ahead of Holiday
The cotton market is trading lower Friday, yielding back its gains of
Thursday as traders anticipate the three-day Fourth of July weekend.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is trading lower Friday, yielding back its gains of
Thursday as traders anticipate the three-day Fourth of July weekend. Thursday
saw USDA increase acres for the 2022 season by 11%, but the market responded
with a buy-the-rumor, sell-the-fact recovery event.
Friday afternoon, CFTC will update the status of key trading entities; among
those, the managed-money funds. That group potentially suffered a huge
reduction in their net long position during the market's six-day mass
liquidation. However, Friday's data will only tell a partial story, as the
numbers gathered will be as of this past Tuesday. The report will out at 3:30
p.m. EDT.
Weather-wise, Thursday's U.S. Drought Monitor showed extreme to exceptional
drought persisting across West Texas. In addition, it showed drought conditions
expanding across the Southeast and the Delta. USDA's most recent data revealed
declining conditions in 10 out of 14 cotton-producing states. The latest six to
ten-day forecast indicates above-normal temperatures across much of the cotton
belt, but also below-normal rainfall for Texas, normal to above-normal for the
Delta and above-normal for the Southeast.
The market will be closed Monday in observance of Independence Day and
trading will resume Monday night at 9 p.m. EDT.
For Friday, support for December Cotton stands at 95.00 cents and 93.25
cents, with resistance at 99.50 cents and 101.50 cents. The estimated morning
volume is 14,078 contracts.
Keith Brown can be reached at commodityconsults@gmail.comor by calling (229)
890-7780.
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