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DTN Morning Cotton Commentary 12/08 07:24
Cotton Eases Up
The cotton market is finding a way to trade higher Monday morning despite
its overall bearish trend.
Keith Brown
DTN Contributing Cotton Analyst
The cotton market is finding a way to trade higher Monday morning despite
its overall bearish trend. Traders may be squaring certain positions ahead of
Monday's December expiration, Tuesday's WASDE, and the Fed's ultimate interest
rate action on Wednesday.
Last Friday, the CFTC issued a backlogged Commitments of Traders report,
covering the time from Oct. 28. The data showed managed-money funds "bought in"
some 7,100 positions, reducing their net-short carry to 74,053 contracts. Their
record high was 81,343 contracts.
As mentioned, Monday marks the final end for the December 2025 contract. Its
trading spanned a high of 82.32 cents from Jan. 30, 2023, to its recent
contract price low of 60.79 cents from Nov. 17, 2025. During its delivery it
saw 185 notices tendered.
Tuesday at noon EST, USDA will issue updated supply-demand tables via its
December WASDE. Last release, the tabulators increased the U.S. 2025 crop some
900,000 bales, as well as reporting higher domestic and world carryouts.
The Federal Reserve will meet Tuesday and announce on Wednesday at 2 p.m.
EST, any action to be taken on U.S. interest rates. According to the CME
Fedwatch Tool, the odds for a cut have moved from an earlier 40% chance to the
current 87% for a quarter-point reduction.
Daily chart support for March cotton stands at 63.75 cents and 63.00 cents,
with resistance hovering about 65.00 cents and 66.50 cents. Monday morning's
estimated opening volume is 8,008 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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