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DTN Morning Cotton Commentary 07/29 07:16
Cotton Prefers Sideways Action
After a recent attempt to trade lower, followed by Tuesday's false rally, it
seems the cotton market would rather run out the month of July.
Keith Brown
DTN Contributing Cotton Analyst
After a recent attempt to trade lower, followed by Tuesday's false rally, it
seems the cotton market would rather run out the month of July. Traders are
trying to decide where the real status of the U.S. crop stands yield-wise,
while understanding demand is lagging. Thus, participants will wait on the
Fed's announcement Wednesday, then Thursday's export sales and Friday's CFTC
update, then start over in August.
Wednesday, the Federal Reserve will announce its latest decision on U.S.
interest rates. Supposedly, there is a 66% chance the central bank will stand
down; but there are those governors who would like to hike rates immediately.
The notice is out at 2 p.m. EDT.
Crude oil is sharply higher Wednesday after Iran launched a surprise attack
on American forces with ballistic missiles. Despite the nature of the attack,
all IRCG missiles were intercepted and knocked down.
This Thursday at 8:30 a.m. CDT, USDA will issue its weekly export sales
report. Highlights from the previous report included sales of 51,287 bales, for
the 2025-26 marketing year and 16,146 for the 2026-27 season. The combined
seasonal summary was 67,433 bales. Although that amount exceeded the 38,435 of
the previous week. Cumulative sales for 2025-26 have reached 107% of USDA's
forecast versus a five-year average of 114% for this point in the marketing
year. Shipments totaled 276,313 bales, up from 214,893 the previous week.
On Friday the CFTC updated its Commitments of Traders data. The results
showed managed-money funds bought some 3,500 futures, further swelling their
net-long position to 53,209 contracts.
Chart support for December cotton stands at 79.45 cents and 79.00 cents,
with resistance around 81.30 cents and 82.10 cents. Wednesday morning's
estimated volume is 5,275 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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