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DTN Morning Cotton Commentary 10/27 07:22
Cotton Leaks Lower
Cotton slips as harvest pressure, the federal outlook weigh markets.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is slightly lower Tuesday, unable to get any friendly
footing, thus far. The 2026 crop is at "peak harvest," suggesting hedging
selling pressure is at its zenith. Traders will also continue to monitor
unfolding Brazilian politics, the Federal Reserve, and other forthcoming
cotton-direct news.
The USDA issued its weekly Crop Progress report Oct. 26. Its data showed 52%
of the U.S. cotton crop had been harvested as of Oct. 25, up from 41% the
previous week and above the five-year average for this date at 45%. Texas,
Mississippi and Arkansas are well above the average pace. The report showed 33%
of the U.S. cotton crop was rated good/excellent as of Oct. 25, down from 35%
the previous week. Texas was 18% G/E, unchanged from last week.
Tuesday and Wednesday, the Federal Reserve meets to discuss the U.S.
economy. Recent reports are showing higher concentrations of inflation thus the
central bank may feel pressed to raise rates. However, most analysts feel that
the central bank will wait till December to do so.
Crude Oil is lower Tuesday morning, at least for the moment, as Saudi
Arabia, Turkey, Pakistan and Iranian officials met in Tehran on Monday to
defuse tensions across the Middle East. The discussions were aimed at keeping
diplomatic channels open and preventing another escalation in hostilities. The
four countries agreed to continue to engage to advance regional peace and
security, according to Iranian state media. However, President Donald Trump
said in an interview he was approaching a decision on whether to strike a deal
with Iran or intensify military operations.
This Thursday, the USDA will issue fresh export-sales. Highlights from that
report revealed total seasonal sales of 199,630 bales, higher than the 154,074
bale number of the previous week. Cumulative sales had reached 47% of USDA's
forecast versus a five-year average of 55%.
For Tuesday close-in support for December Cotton stands at 78.20 cents and
77.85 cents, with resistance around 80.00 cents and 81.50 cents. This morning's
estimated volume is 13,340 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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