DTN Morning Cotton Commentary          09/16 07:28

   Cotton Up on Carolina Storm

   The cotton market is higher Monday morning as a weekend storm off the 
Carolina Coast emerged.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is higher Monday morning as a weekend storm off the 
Carolina Coast emerged. In addition, there was an increase in new short 
positions by speculators last week.

   The National Hurricane Center is projecting "potential cyclone eight" will 
move inland across the Mid-Atlantic states by Wednesday. Currently, it is 
packing 60mph winds and double-digit rainfall amounts. 

   Last Friday, the CFTC reported in its weekly Commitment-of-Traders report 
that the managed-money funds were even more bearish. Per last Tuesday's close, 
they had sold some 6800 contracts, ratcheting up their net short position to 
49,500 contracts. 

   Monday afternoon at 4 p.m. EDT, USDA will issue its crop condition report. 
Last week's data showed that the U.S. Crop was 40% good-excellent versus the 
prior 44% good/excellent rating.

   The Federal Reserve is holding its two-day monthly meeting, at which it will 
reportedly announce a reduction in U.S. interest rates. However, traders are 
torn between a quarter-point hike or the more desired half-point increase. The 
announcement will occur at 2 p.m. Wednesday.

   Summary data from China indicates an ever-weakening economic state. 
Industrial output growth slowed to a five-month low in August, while retail 
sales and new home prices also missed. The weak numbers are making Beijing's 
five percent target a more distant prospect. Lastly, China's new home prices 
fell at the fastest pace in more than nine years in August.

   For Monday, close-in chart support for December cotton stands at 69.45 cents 
and 69.00 cents, with 71.50 cents and 72.00 cents as resistance. Monday 
morning's estimated volume stands at 11,723 contracts. 

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




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