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DTN Morning Cotton Commentary 04/25 07:47
Cotton Trades Steady
The cotton market is trading essentially sideways in a narrow range as it
attempts to hold its ground.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is trading essentially sideways in a narrow range as it
attempts to hold its ground. This week saw the fiber market slough-off an
emotional and sharply lower Dow Jones to trade higher and now looks poised for
even greater gains.
Spot May cotton is in its delivery period, however there were zero
deliveries Friday. Its open interest has shrunk to some 46 contracts. Delivery
period will run through May 7.
Friday at 3:30 p.m. EDT, the CFTC will update its Commitments of Traders
information. Last week, the managed-money funds bought in over 13,000 contracts
per last Tuesday's close, reducing their bearish carry to 42,418 contracts. At
their peak bearish position, the funds were net short 79,957 contracts.
Crude oil is setting up for a weekly decline of nearly 2% amid concerns of
oversupply and uncertainty around tariff talks between the U.S. and China. A
stronger U.S. dollar has also added pressure. Crude oil erased earlier gains
after a spokesperson from China's foreign ministry said China and the United
States were not having any consultations or negotiations on tariffs. That
contradicted earlier comments by President Trump, who said on Thursday trade
talks between the U.S. and China were underway.
Certain weather services are reporting drought and abnormally dry conditions
are prevailing in portions of far southern China, the North China Plain, and
the central Yellow River Basin. These areas have trended drier or much drier
than normal in recent weeks with periods of drier weather also occurring
earlier in the year. The need for rain remains high in order to improve
planting and general development conditions, although the growing season is
still quite young leaving plenty of time for improvement. Still, the situation
bears watching.
For Friday, close-in chart support for July cotton stands at 68.10 cents and
67.15 cents, with resistance at 70.20 cents and 71.00 cents. Friday morning's
estimated volume is about 9,702 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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