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DTN Closing Cotton            10/27 13:42

   Cotton Higher on China Talks, Await Exports

   The cotton market was markedly higher Wednesday as renewed trade talks 
between the U.S. and China cranked up Tuesday night.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market was markedly higher Wednesday as renewed trade talks 
between the U.S. and China cranked up Tuesday night. It's worth noting that 
President Trump's "phase-one deal" expires this December. In addition, some 
traders have growing concerns about the lateness of the crop, and are beginning 
to worry about late-season weather adversities. Lastly, Thursday, USDA will 
issue its weekly export sales. Last week saw dynamic sales in combined seasons 
of 455,000 bales, with China as the main buyer with 322,000 bales. 

   The Commerce Department's Bureau of Economic analysis will issue third 
quarter GDP results Thursday. Gross Domestic Product (GDP) measures the 
annualized change in the inflation-adjusted value of all goods and services 
produced by the economy. It is the broadest measure of economic activity and 
the primary indicator of the economy's health. Thus far for 2021, Q1 showed 
growth of 6.8%, Q2 was 6.5%, but estimates for Thursday's estimate calls for 
2.8% growth pace.   

   The U.S. dollar continues to peddle sideways. The greenback is anticipating 
what action the Federal Reserve will do concerning tapering in November. 
"Tapering" refers to the central bank pulling back on stimulus. Some traders 
believe the act of tapering is tantamount to the actual increase of interest 
rates. Such action would be considered dollar positive and commodities negative.

   For Wednesday, December settled at 110.52 cents, up 1.81 cents, March ended 
at 108.64 cents, plus 1.77 cents and December 2022 ended at 90.62 cents, 0.80 
cent higher; estimated volume was 34,062 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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