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DTN Closing Cotton 09/30 13:35
Cotton Futures Struggle for Direction as Harvest Pressure and Demand
Concerns Weigh on Prices
The cotton market was conflicted whether to further decline or to attempt a
recovery rally Wednesday.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market was conflicted whether to further decline or to attempt a
recovery rally Wednesday. The ICE Futures were egregiously "oversold" from
Tuesday's limit move, and yet a positive session would have been somewhat
normal. Traders will continue to focus on yields, harvest pressure, and demand
going into the new month and quarter.
The Personal Consumption Expenditures (PCE) price index for August showed a
3.4% annual rate, below the 3.7% expected. Even more encouraging was core PCE.
Excluding food and energy, it rose 3% year on year, down from 3.3% the month
before and also lower than economists had forecasted. Now the CME's Fedwatch
tool has a 49% chance of a quarter-point rate hike next month. That's down from
71% on Monday.
Also Wednesday, USDA released its quarterly grains stocks inventories.
Generally, it was bearish to corn, friendly to beans and neutral to wheat. The
data did not affect cotton.
Thursday, USDA will release another round of weekly exports-sales. Last
week's combined sales tallied some 350,000 bales. Mexico was the largest buyer,
while China was a net canceller of 4,000 bales. Weekly shipments totaled
164,700 bales, up 16% weekly.
On Friday, at 3:30 p.m. EDT, the CFTC will update its Commitments of Traders
data. Last week's numbers showed the managed-money traders were net sellers of
16,000-plus contracts, which reduced their net long carry to 81,610. Their
record stands at 108,788 contracts.
For Wednesday, December closed at 78.52 cents, down 34 points, March 2027
finished at 81.38 cents, off 37 points, and July 2027 settled at 83.53 cents,
minus 29 points. Today's estimated volume was 83,351 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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