DTN Morning Cotton Commentary          05/14 08:01

   Cotton Lower Tuesday

   The cotton market is lower Tuesday morning as the technical trend is 
scattering whatever would-be bulls there are.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is lower Tuesday morning as the technical trend is 
scattering whatever would-be bulls there are. As of Friday, the managed-money 
funds deepened their short position, and growers (those holding 2023 
production, and initiating 2024 production), are caught like the proverbial 
"deer in the headlights". There are several key economic reports due this week, 
including Tuesday's PPI, Wednesday's CPI, and China is set to report on certain 
aspects of her economy on Friday. 

   Tuesday's PPI number was 0.5% versus the 0.3% expected. On face value, the 
number was more inflationary than expected. Wednesday, traders will see an 
updated CPI Index. If that number is higher, then likely lowering U.S. interest 
rates will be seemingly off the table.

   Monday, USDA issued its weekly crop progress reports. As it stands the 2024 
crop is going into the ground slightly faster than its historical pace. 
Numerically the crop is 33% planted versus its five-year average of 31%.

   Also Tuesday, NOAA will finalize its weekly Drought Monitor tabulations, and 
will issue those results this Thursday at 8:30 a.m. EDT. The last reading had 
the majority of the U.S. Cotton Belt with only 8% dry-to-drought conditions.

   On Thursday, USDA will issue another round of export sales. Last week's 
business was higher than in recent weeks, with sales of 253,000 bales, and 
shipments of 249,000. Such was a likely testament to cotton's cheaper prices. 

   For Tuesday, chart support for December cotton stands at 74.70 cents and 
74.00 cents, with 76.00 cents and 76.65 cents as resistance. Tuesday morning's 
estimated volume stands at 9,688 contracts. 

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




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