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DTN Closing Cotton 07/08 13:35
Cotton Eases Off
After a 450-point rally over the past two sessions, the cotton market backed
down today.
Keith Brown
DTN Contributing Cotton Analyst
After a 450-point rally over the past two sessions, the cotton market backed
down today. Technical concerns with being "overbought" and new anxieties over
the renewed hostilities with Iran, sent some traders to the sidelines, while
others booked profits.
Thursday, July cotton will expire on the close. Its final settlement could
adversely impact cotton's daily continuation charts with a switch-of-contract
gap.
Also on Thursday, USDA will issue fresh export sales numbers. Last week saw
net sales of 42,000 bales, off 42% weekly, and down 70% on the four-week
average. Shipments tallied 219,000 bales, off 27% weekly. The report is out at
8:30 a.m. EDT.
On Friday, USDA will issue its latest supply-demand update, via the July
WASDE. Last month the tabulators upped U.S. production to 9.80 million bales.
The report is out at noon EDT.
Also Friday afternoon, the CFTC will release new Commitment of Traders data.
The previous report showed that the funds had net-sold some 6,400 positions,
reducing their net-long carry to 31,985 contracts. Given this week's upward
spike in prices their position is likely to be further reduced.
The weekly EIA stocks report was bearish against expectations for crude oil,
nominally bullish for gasoline, and bullish for diesel, but the effects are
limited by the market's focus on the events in the Middle East, namely the
apparent collapse of the ceasefire between the U.S. and Iran. Crude oil,
gasoline and distillate stocks remain near historic lows.
For Wednesday, July closed at 76.21 cents, down 73 points; December closed
at 80.67 cents, minus 62 points; and March 2027 finished at 82.10 cents, off 58
points. Wednesday's estimated volume was 54,192 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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