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DTN Morning Cotton Commentary 12/06 08:13
Cotton Higher, Anticipates Tuesday's Report
The cotton market is trying to put on a decent face for a bearish week.
By Keith Brown
DTN Cotton Correspondent
The cotton market is trying to put on a decent face for a bearish week.
Earlier comments from President Trump suggesting the trade deal may have to
wait until after the 2020 election sent prices down some 200 points, but the
market has staged a small comeback. Thursday's sales and exports were okay, and
now the market is anticipating more friendly supply-demand data come next
Tuesday. Early sentiment suggests a 500,000-bale cut to the U.S. crop may be in
order.
Friday afternoon the CFTC will publish its bi-weekly commitment-of-traders
report. As they currently stand, managed money speculators are net short some
5,000 contracts. This number is way off from their summer peak of 49,000
contracts. With the right dose of bullish fundamentals, such a moderate trade
deal, or a dynamic adjustments to the supply-demand numbers, they could easily
sway bullish.
The Labor Department reported a 'blow-out" jobs number. Expectations were
calling for an increase of 183,000 non-farms jobs, but the number released was
266,000 new jobs. The overall unemployment rate remained at its recent
historical low 3.6%. The Dow Jones and related stock markets jumped higher on
the news.
OPEC and Russia are meeting today to decide on new production cuts. A
current number being floated to prop up crude prices is a 400,000 barrel per
day cut. Crude oil prices have rallied this week on those expectations.
For Friday, December cotton expires at 2 p.m., but support for the March
stands at 64.00 cents and 63.70 cents, with overhead resistance at 66.00 cents
and 66.90 cents. Overnight estimated volume is 7,057.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
(BE)
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