DTN Morning Cotton Commentary          02/25 07:12

   Cotton Grinds Higher 

   The cotton market is somewhat higher Wednesday as end-of-the-month squaring 
and speculative short-covering are occurring. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is somewhat higher Wednesday as end-of-the-month squaring 
and speculative short-covering are occurring. Currently, the market is on task 
to close higher today, making it five out of the last six sessions.

   Last night, President Trump delivered the longest State of the Union address 
in modern history. In it, he extolled the economic gains being made and was 
upbeat about the future. We note that agriculture was not specifically 
mentioned but certainly trade and tariffs were more than inferred.

   Overnight, Spot March cotton was hit with 462 notices. It was one of the 
largest issuances in recent memory. BNP (448) and Term (18) were the issues, 
with JP Morgan (230) and SG Americas (231) as the stoppers. The delivery period 
runs through Monday, March 7. 

   Thursday, USDA will release its weekly export sales report. Last week saw a 
combined seasonal sales number of 335,663 bales, for which the old crop was a 
marketing-year-high amount. Weekly shipments were 172,6000 bales, off 9% from 
the previous week.

   On Friday at 3:30 p.m., CFTC will issue another Commitments of Traders 
report. This past week's showed managed-money funds had net sold some 3,900 
contracts, swelling their current bearish position to 79,508 contracts. For 
context, their record high negative carry, from last October, stands at 81,343 
contracts.

   Chart support for July cotton stands at 66.60 cents and 66.00 cents, with 
resistance around 68.20 and 68.50. Wednesday morning's estimated volume is 
23,738 contracts.

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




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