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DTN Morning Cotton Commentary 04/27 07:14
Cotton Market Resumes Higher Monday Morning
After some hesitancy last week, the cotton market is right back in its
pursuit of higher highs.
Keith Brown
DTN Contributing Cotton Analyst
After some hesitancy last week, the cotton market is right back in its
pursuit of higher highs. Traders still see the U.S. crop as being in trouble as
98% of the planted area is suffering from some form of drought. In fact, some
of the forecasted weekend rains for the parched Southeast didn't necessarily
materialize. Also, the CFTC update was supportive to the rally.
First notice day for the May contract was last Friday. Thus, 38 notices were
tendered against the Spot May contract. The largest deliverer was StoneX, while
the best stopper was SG Americas. The delivery process runs through May 6.
Last Friday, the CFTC updated its Commitment of Traders standings. Per last
Tuesday's close, the managed-money funds bought some 17,600 positions, lifting
their net-log carry to 34,464 contracts.
At 4 p.m. today, USDA will issue the latest Crop Progress report. Last week,
the U.S. cotton crop was reported at 11% planted, in line with the five-year
average.
The Climate Prediction Center has upped its drought reading for the U.S.
Cotton Belt from 97% to 98%. With that, the 6-to 10-day map (May 2-6) shows
below-normal to much-below normal temperatures for Texas, the U.S. Delta and
the Southeast. Rain wise, Texas looks to have normal chances, as does the
Delta, but the Southeast has above-normal odds.
The Federal Reserve meets Tuesday and will announce any change to U.S.
monetary policy on Wednesday at 2 p.m. EDT. Currently, no change is expected in
interest rates.
Chart support for July cotton stands at 78.25 cents and 77.65 cents, with
resistance around 80.75 cents and 82.00 cents. Monday morning's estimated
volume is 13,215 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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