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DTN Morning Cotton Commentary 09/22 07:20
Cotton Lower on Lower Trend
The cotton market turned sharply lower Tuesday, giving back much of Monday's
rally as traders reacted to producer selling and weaker crop conditions.
Keith Brown
DTN Contributing Cotton Analyst
The sharply higher session Monday is giving way to the bearish trend as the
cotton market is triple digits lower this morning. To some degree, the market
caught "China Fever" as surrounding U.S. agricultural markets were higher. The
one-day rally brought in some producer fixation-selling.
The USDA published its weekly crop progress reports Monday. The weekly Crop
Progress report showed 34% of the U.S. cotton crop was rated good/excellent as
of Sept. 20, down from 36% the previous week, 47% a year ago and below the
five-year average for this date at 42%. Texas was 15% G/E, down from 18% last
week and a five-year average of 30%. The report also showed 65% of the crop had
bolls open versus 57% a week ago and a five-year average of 58% and that 13%
was harvested versus 8% a week ago and a five-year average of 11%.
The long-awaited Trump/Xi trade meeting will take place in Washington. The
two leaders will discuss, among many topics, tariffs, trade, AI, Iran, and
Taiwan.
Also on Thursday, the USDA will issue its weekly exports-sales. Highlights
from last week included combined seasonal sales of 77,391 bales, versus the
previous total of 76,318 bales sold. For last year, those combined sales were
186,100 bales. Weekly Shipments totaled 142,076 bales, down from the previous
177,774 bales exported.
Crude Oil is sharply lower today as the prospects for a diplomatic solution
to the U.S.-Iran war are improving. Supposedly, U.S President Trump may meet
with the president of Iran during the United Nations General Assembly talks in
New York.
For today close-in support for December Cotton stands at 8210 and 8070, with
resistance around 8400 and 8500. This morning's estimated volume is 13,550
contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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