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DTN Morning Cotton Commentary 05/12 07:15
Cotton Does About Face Tuesday
The cotton market is markedly lower Tuesday after Monday's trade saw new
life-of-contract gains.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is markedly lower Tuesday after Monday's trade saw new
life-of-contract gains. Speculators and funds were all in the buying mood
Monday as a bit of U.S./Chinese euphoria was in the air. Tuesday, traders will
see updated supply-demand tables and then will better focus on this week's
U.S./China talks.
USDA released its weekly Crop Progress report Monday afternoon. The data
showed 29% of the U.S. cotton crop was planted as of May 10, up from 21% the
previous week and 27% a year ago. The five-year average for this date is 28%.
Texas was 27% planted versus a five-year average of 26%, and Georgia was 24%
planted versus 25% on average. Arkansas was 40% planted versus a five-year
average of 35%, and Mississippi was 47% planted versus 36% on average
Tuesday at noon EDT, USDA will issue its May WASDE. A survey of analysts
showed an average trade estimate to be 13.76 million bales, which would be down
from last year's 13.92 million. U.S. exports are expected around 12.27 million
bales versus 12.00 million in 2025-26, and ending stocks are expected to be
around 4.20 million bales compared to 4.40 million. World production for
2026-27 is expected to be around 119.06 million bales versus 121.87 million
seen in 2025-26. Global ending stocks are pegged at 75.63 million versus the
previous 77.04 million bales.
This week will see the Trump/Xi trade meeting in Beijing. The two sides have
much to discuss including tariffs, Taiwan, Iran, and rare earths.
Crude oil is higher Tuesday after President Trump declared the ceasefire
with Iran was on "life support." Tehran's counter-proposal to end the war
included separate talks for nuclear, U.S. reparations, and ownership of the
Hormuz.
Chart support for July cotton stands at 85.00 cents and 84.55 cents, with
resistance around 88.50 cents and 89.00 cents. Tuesday morning's estimated
volume is 30,935 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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