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DTN Morning Cotton Commentary          08/19 07:34

   Cotton Lower Friday; Dollar Strong

   The cotton market is lower this morning, along with so many outside markets, 
as the U.S. dollar continues to push higher. There is also some technical 
profit-taking occurring in the ICE Futures. 


Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is lower this morning, along with so many outside markets, 
as the U.S. dollar continues to push higher. There is also some technical 
profit-taking occurring in the ICE Futures.

   This week saw China's central bank lower rates, thus depressing the yuan, 
while the U.S. Fed reaffirmed its commitment to raise rates via its July 
minutes. That notion caused the greenback to strengthen. 

   The updated U.S. Drought Monitor showed little improvement in the drought 
situation in West Texas. Most of the Lone Star state is rated D5 to D3, which 
is extreme or exceptional drought conditions. However, there are rain 
opportunities expected over the next five days, as well as the extended 
outlooks. They call for much above normal chances.

   From the recent export-sales data, cumulative sales for 2022/23 have reached 
7.368 million bales, which is the highest for this time of year, dating back to 
the 2011/12 season. The five-year average is 6.828 million bales. Sales have 
reached 65% of the USDA's forecast versus the five-year average of 48% sold. 
The new marketing year commenced on Aug. 1. Interestingly, Thursday's largest 
buyer was China (30,015 bales), while Vietnam was a big canceller (32,113).

   Friday afternoon the CFTC will issue its weekly Commitments of Traders 
report. Last week saw the managed money funds at 33,000 net-long contracts. 
But, of course, since that time, the market has enjoyed its bullish spike, so 
the standings may prove to be interesting.

   For Friday, support for December cotton is at 109.10 cents and 108.55 cents, 
with resistance at 114.90 cents and 116.85 cents. Friday morning's estimated 
volume is 3,903 contracts. 

   Keith Brown can be reached at commodityconsults@gmail.comor by calling (229) 
890-7780.




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