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DTN Morning Cotton Commentary 09/17 07:12
Cotton Halts, Waits For Fed
The cotton market is slacking off Wednesday, awaiting the Fed announcement.
Keith Brown
DTN Contributing Cotton Analyst
After ripping higher Tuesday on strong volume, the cotton market is slacking
off Wednesday morning as traders await the Fed's 2 p.m. EDT announcement.
Additionally, the market wants to see Thursday's export sales and the outcome
of the Trump/Xi phone call on Friday.
The Federal Reserve will announce its interest rate decision today at 2 p.m.
EDT, followed by a question and answer session with Fed Chairmain Jerome
Powell. Odds are calling for a quarter-point cut, but some think there could be
a half-point reduction.
President Trump indicated he will talk to China's President Xi on Friday
regarding trade. The success of the Madrid talks has enabled the possibility of
a face-to-face meeting sometime in October.
USDA will issue its weekly export sales on Thursday. Last week saw net sales
of 129,000 off 47%, and shipments of 130,000 bales, down 16%. However, China
and India were in the business mix.
Tuesday's up move in ICE cotton was technically encouraging in that the
futures closed over the 50-day average, and are hovering just below the 100-day
average. With certain speculatores heavily net-short, challenging such
indicators may cause some bearish traders to rethink their stances.
Daily chart support for December cotton stands at 67.10 and 66.45 cents,
with resistance at 68.00 and 68.50 cents. Wednesday morning's estimated volume
is 6,845 contracts.
Keith Brown can be reached at commodityconsults@gmail.comor by calling (229)
890-7780.
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