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DTN Morning Cotton Commentary 08/07 07:11
Cotton Considers Its Path
This week's cotton market has seen some positive action and is attempting to
build on those gains.
Keith Brown
DTN Contributing Cotton Analyst
This week's cotton market has seen some positive action and is attempting to
build on those gains. Going forward, traders will assess immediate and future
growing conditions, potential demand, technical points and financial nuances to
help further the market's advance.
China's ZCE futures have been up in four of the last five sessions, gaining
2.5% in the lead month. State Reserves Authority has completed its 14th
consecutive sold-out auction Friday for approximately 8,012 tonnes (about
35,253 bales). The 14-day total reached 112,241 tonnes (about 493,860 bales).
The breakdown of inventory consisted of roughly 52% U.S. cotton, 18% Brazilian
and 30% Xinjiang.
Friday at 3:30 p.m., the CFTC will update its Commitment of Traders data.
The previous report showed that the managed-money funds net sold some 700
positions, slightly reducing their net-long carry to 52,410 contracts.
Next week, Wednesday, Aug. 12, USDA will present its August World
Agricultural Supply and Demand Estimates (WASDE) and Crop Production reports,
updating the various supply-demand tables. Last month, the 2026 crop was raised
from 13.30 million bales to 13.70 million bales, while ending stocks were also
increased from 3.70 million bales to 4.10 million bales. The data will be out
at noon EDT.
The 6- to 10-day weather forecast (Aug. 12-16) shows above to
much-above-normal temperatures for the U.S. Cotton Belt. Rain wise, West Texas
should see nearly normal chances, while the lower Delta and the Southeast may
anticipate normal to below-normal opportunities.
Chart support for December cotton stands at 82.00 cents and 81.10 cents,
with resistance around 84.20 cents and 85.00 cents. Friday morning's estimated
volume is 11,183 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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