DTN Closing Cotton            07/13 13:51

   Cotton Rally Fades After Triple-Digit Gains

   Spurred on by surging outside markets and geopolitical happenings, the 
cotton market posted triple-digit gains in the morning, reached a key technical 
point, and then peeled lower. 

Keith Brown
DTN Contributing Cotton Analyst

   Spurred on by surging outside markets and geopolitical happenings, the 
cotton market posted triple-digit gains in the morning, reached a key technical 
point, and then peeled lower. Volume was a noteworthy 55,000-plus contracts. 
Likely there was grower fixation selling occurring, which may have impaired the 
rally.

   The afternoon at 4 p.m. EDT, USDA will update its crop condition data. Last 
week, the overall U.S. crop was rated at 46% good to excellent. For context, 
this year's highest reading was 53% good to excellent, and the five-year 
average stands at 52%.

   Tuesday and Wednesday, traders will assess two key inflation reports. On 
Tuesday, the CPI, or consumer inflation will be aired, while on Wednesday, the 
PPI, or wholesale inflation, will be released. Their combined results will 
likely influence the "new" Federal Reserve's insights on interest rates later 
this month.

   Crude oil prices were materially higher Monday after President Donald Trump 
said the U.S. would reimpose naval blockade against Iran. The president said 
the U.S. will protect traffic in Hormuz but demanded reimbursement equivalent 
to 20% of all cargo shipped. The decision to reimpose the blockade comes after 
the U.S. and Iran exchanged strikes over the weekend.

   A major weather forecasting service reports that West Texas still needs 
significant moisture. With that, scattered showers and thunderstorms are 
possible this week and they may favor some of the drier areas in the south of 
Texas. However, most other U.S. production areas show varying conditions of 
development, with most crops appearing to be in relatively good shape. 
Nonetheless, there are swaths of the Carolinas and parts of the central Delta 
that also need showers. Although some rain is likely for many of those areas 
this week, its distribution will not necessarily be even.

   For Monday, December closed at 81.51 cents, off 3 points; March 2027 
finished at 82.93 cents, plus 2 points; and July 2027 settled at 83.16 cents, 
up 4 points. Monday's estimated volume was 58,940 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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