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DTN Morning Cotton Commentary 05/17 07:37
Cotton Sings a Higher Note
Cotton is attempting to end this week on a more positive note.
Keith Brown
DTN Contributing Cotton Analyst
Cotton is attempting to end this week on a more positive note. The market
remains steeply oversold, and bargain-basement bulls are seemingly too timid to
buy right in. Yet, the market overcame a poor export sales number to close
better.
From the export sales statistics, we note that cumulative sales for 2023/24
stand at 11.80 million bales. That amount is down from the 12.63 million of a
year ago and is at the lowest point for this time of the season since
2015/2016. Percentage-wise, sales have reached 102% of the USDA's forecast for
the current marketing year, compared to a five-year average of 106%. Thursday's
shipments of 238,755 bales were the second lowest amount since early January,
prior to the massive bull rally.
The weekly U.S. Drought Monitor showed approximately 6% of U.S. cotton
production was within an area experiencing drought as of May 14, down from 8%
the previous week, 37% a year ago, and 56% two years ago.
Friday afternoon at 3:30 p.m. EDT, CFTC will update the position of the
managed-money funds. This is a keenly watched group by traders in general. Last
week, they had extended their net short position, and currently stand at 13,000
contracts net bearish.
For Friday, chart support for December cotton stands at 73.75 cents and
73.00 cents, with 75.75 cents and 76.25 cents as resistance. Friday morning's
estimated volume stands at 6,237 contracts.
Keith Brown can be reached at commodityconsults@gmail.com or by calling
(229) 890-7780.
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