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DTN Morning Cotton Commentary 05/26 07:13
Cotton Starts Week Higher
After being pounded lower after its 88.08-cent top, the cotton market is
commencing this last week of May somewhat higher.
Keith Brown
DTN Contributing Cotton Analyst
After being pounded lower after its 88.08-cent top, the cotton market is
commencing this last week of May somewhat higher. Traders will be assessing
several upcoming events such as weather and the U.S. Iran War for some price
direction. Also cotton-specific, there is Tuesday's crop progress and Friday's
exports-sales to be considered.
Last Friday, the CFTC issued its weekly Commitments of Traders data. Despite
the recent bearish trading turmoil, the managed-money funds bought 2,475
positions, lifting their net-long carry to 62,045 contracts. For context, their
net-long carry to 58,000-plus. The all-time bullish record, from 2018, stands
at 108,788 contracts.
Also Friday's U.S. Drought Monitor continued to show 97% of the U.S. crop
remains in drought. That record stands at 98%.
This afternoon at 4 p.m. EDT, USDA will update the progress of the 2026
crop. Last week, the report, representing the top 15 producing states, was 41%
planted. The five-year average is 40% complete.
Option expiration for the July Contract is Friday June 12th, or 20 days
hence. Then Spot July Delivery commences on June 24th, running through July
9th.
The 6- to 10-day forecast (May 31-June 4) shows below to much-below-normal
temperatures for Texas, the US Delta, and the Southeast. Rainwise, Texas is
forecasted for above-normal precipitation, while the Delta and the Southeast
look to have slightly higher chances for rain.
Chart support for December cotton stands at 78.25 cents and 78.00 cents,
with resistance around 81.85 cents and 83.00 cents. This morning's estimated
volume is 25,475 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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