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DTN Morning Cotton Commentary          02/20 07:54

   Cotton Eases Off, Awaits Friday's Export Sales 

   The cotton market has been the beneficiary of a record stock market, 
expectations for lower 2020 acres, and the possibility China will still emerge 
as a substantial buyer of U.S. cotton

By Keith Brown
DTN Cotton Correspondent

   The cotton market has been the beneficiary of a record stock market, 
expectations for lower 2020 acres, and the possibility China will still emerge 
as a substantial buyer of U.S. cotton. Thus, the ICE Futures' charts continue 
to look decent. 

   Friday, USDA will issue its holiday-delayed export sales data. Of late, the 
market has seen record sales and shipments for the 2019/2020 season. In fact, 
current season activity has gone beyond USDA's original forecast.   

   Friday is also the final day for producers to square up their cash positions 
ahead of Monday's delivery period for basis spot March cotton. By Friday's 
close, producers must have fixed or rolled their positions forward. 

   Overnight, China's central bank lowered its one-year loan prime rate to 
4.05% from 4.15% and the five-year loan rate to 4.75% from 4.80%. The move was 
done in an effort to keep the world's second-largest economy stable against the 
negative impact of the Covid-19 virus. Talk is China's manufacturers are 
running out of needed raw materials, causing some Chinese factories to close 
their doors. This situation is adversely affecting the global economy and 
underscores just how significant China has become to the world's supply system. 

   For Thursday, close-in support for March Cotton lies at 67.85 cents and 
67.25 cents, with resistance at 69.10 cents and 69.90 cents. Overnight 
estimated volume is 8,245 contracts.  

   Keith Brown can be reached at commodityconsults@gmail.com or by calling 
(229) 890-7780. 


(KR)

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