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DTN Morning Cotton Commentary 04/14 07:16
Cotton Inches Higher
Overnight, ICE cotton continued to set higher price gains, as the market
posted its fourth consecutive positive close, as well as nailing its seventh
higher close of the last eight sessions, and the 12th higher close of the last
14 sessions for a two-week increase of nearly 750 points.
Keith Brown
DTN Contributing Cotton Analyst
Overnight, ICE cotton continued to set higher price gains, as the market
posted its fourth consecutive positive close, as well as nailing its seventh
higher close of the last eight sessions, and the 12th higher close of the last
14 sessions for a two-week increase of nearly 750 points. Moreover, the
December 2027 contract hoisted a new contract high close. Traders are seeing
the deepening drought situation, as well as being mindful of the Middle East
conflict.
USDA reported that 7% of the U.S. crop is planted. That compares with the
five-year average of 7%. Texas is 11% seeded compared to 12%, but Georgia,
where the drought is most acute, is 1% planted and the five-year average is
also 1%.
This Thursday, traders will see a new round of export sales from USDA. Last
week's data showed net weekly sales were 319,000 bales, down 14%, while
shipments were 342,000 bales off 4%.
First notice day for the May contract is April 24. Its delivery period runs
through May 6.
Also, on Thursday and this Friday, traders will see fresh retail sales data
and updated housing starts numbers. Both of those reports reflect a large
portion of domestic demand for the cotton industry.
Crude oil is lower today as the International Energy Agency forecast that
"demand destruction will spread" amid growing supply scarcity and higher
average due to the U.S./Iran war. The conflict has already led to the greatest
disruption to oil supply in history, according to the IEA, and the largest ever
monthly spike in prices during March.
Chart support for July cotton stands at 75.60 cents and 74.70 cents, with
resistance around 78.20 cents and 79.00 cents. Tuesday morning's estimated
volume is 32,310 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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