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DTN Morning Cotton Commentary 01/06 08:17
Cotton Trudges Higher
The cotton market is somewhat higher Tuesday, amid something of a technical
rally.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is somewhat higher Tuesday, amid something of a technical
rally; but some say it may be an asset run as well. The latter is hard to
digest given the supposed amount of supply in the world. Yet, the market is
acting demonstratively better.
Monday's export sales report showed U.S. cotton export sales for the week
ended Dec. 25 were 134,000 for the current marketing year and 2,208 for
2026-27. The total was 136,204 bales. The number was down from 183,560 the
previous week and 319,649 the week before that. Still, the fact sales were
still above 100,000 is seen as a positive. Cumulative sales for 2025-26 have
reached 6.50 million bales, which is the lowest in 11 years. However, having
two reports showing sales in excess of 300,000 bales, since mid-November is
likely improving traders' outlooks.
The CFTC issued another catch-up Commitments of Traders report Monday,
covering Dec. 30. Again, the managed-money funds net were net buyers, having
bought nearly 1400 positions. Their action further reduced net-short carry to
49,078 contracts.
Crude oil is edging slightly higher Tuesday as traders weigh the idea of
ample global supplies and the uncertainty around Venezuelan crude. Supposedly,
most traders expect oil to be under pressure in 2026 due to growing supply and
waning demand.
Daily chart support for March cotton stands at 64.80 cents and 64.00 cents,
with resistance hovering about 65.75 cents and 66.25 cents. Tuesday morning's
estimated opening volume is 30,893 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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