DTN Morning Cotton Commentary          01/28 07:21

   Cotton Uplifted By Outside Markets

   The cotton market has fully recovered from Monday's audacious decline.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market has fully recovered from Monday's audacious decline. 
Traders are watching the precious metals trade parabolically, which is causing 
fiat currencies, including the U.S. dollar to decline in their purchasing 
power. Thus, there is a growing thought emerging that says only real and 
tangible commodities, such as energies, grains, cotton and others will increase 
in value.

   The U.S. government may be heading for another partial shutdown on Jan. 30. 
The death of another Minnesota person by federal agents this past weekend is 
unifying the Democrats in Congress to halt the funding of the DHS budget. 
However, most funding for Homeland Security, some $29 billion, has already been 
approved.

   March options will expire on Feb. 6, or in about two weeks. Traders will be 
anticipating what amount of Puts and Call may expire "in-the-money".

   Thursday at 8:30 a.m. EST, USDA will issue its weekly export sales report. 
The previous two releases both showed marketing-year high sales. Cumulative 
sales have reached 66% of the USDA forecast versus a five-year average of 80% 
for this point in the marketing year.

   Also on Thursday, Q4 GDP, Factory Orders and Durable Goods will be released. 
Expectations call for improvements in all numbers.

   The latest drought information shows the U.S. cotton planted area at 80% 
drought (varying stages) compared to the previous reading of 83% drought. A 
newer update from NOAA will be released this Thursday.

   Chart support for March cotton stands at 63.50 cents and 63.00 cents, with 
resistance hovering about 64.70 cents and 63.00 cents. Wednesday morning's 
estimated volume is 21,875 contracts.

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




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