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DTN Morning Cotton Commentary 06/05 07:15
Cotton Unravels
After a promising, positive start to the first week of June, the cotton
market has turned lethargic and bearish
Keith Brown
DTN Contributing Cotton Analyst
After a promising, positive start to the first week of June, the cotton
market has turned lethargic and bearish. Improving growing conditions, ideas of
greater 2026 acres, and weak technical action are proving to be highly
discouraging to participants across the board.
Friday morning, the Labor Department will release its jobs numbers for May.
Last month's data showed a much higher employment rate than most were
expecting. For this report, expectations call for non-farms jobs to be at
95,000 versus the prior 115,000 jobs.
Also later Friday, the CFTC will update its Commitments of Traders report.
Last week's numbers showed the occurrence of net-selling for the first time in
a dozen weeks. Managed-money funds sold some 7,800 positions, reducing their
overall net-long to some 54,000 contracts. The data will be out at 3:30 p.m.
EDT.
As a reminder, option expiration for the July contract is Friday, June 12,
while the spot July contract commences delivery on June 24, running through
July 9.
Crude oil is little changed Friday, following sharp declines in the previous
sessions. With that, despite the hopes for a near-term end to the U.S./Iran
war, Hezbollah rejected a new ceasefire deal in Lebanon. The WTI is up more
than 6% since the start of fighting in March. Meanwhile, U.S./Iran peace talks
drag on as traffic in the Strait of Hormuz, where a fifth of the world's oil
passes, remains limited.
Chart support for December cotton stands at 76.85 cents and 76.00 cents,
with resistance around 79.60 cents and 81.10 cents. Friday morning's estimated
volume is 29,487 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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