DTN Morning Cotton Commentary          09/30 07:15

   Cotton Shakes The Cobwebs? 

   Cotton rebounds cautiously after crash, awaiting key economic data reports. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is gingerly higher this morning after its devastating 
plunge to limit-down yesterday on massive volume. The market's collapse was a 
culmination of various technical and fundamental elements being played out all 
at once. Traders will look to fresh data in the new month and quarter and try 
to put the pieces back together.   

   At 8:30 a.m. Wednesday, the Commerce Department will release its August 
personal consumption expenditure price index (PCE).  Supposedly that report is 
the Fed's preferred inflation gauge. Some analysts say "if" that number shows a 
higher inflation pace, then the central bank might raise rates in October, not 
waiting for December. 

   Also, the USDA will release its quarterly grains stocks inventories at noon. 
If that data is amply positive and rallies the Chicago Grains, it might help 
lift the down-and-out cotton market.  

   On Thursday, the USDA will release another round of weekly exports-sales. 
Last week's combined sales tallied some 350,000 bales. Mexico was the largest 
buyer, while China was a net canceller of 4,000 bales. Weekly shipments totaled 
164,700 bales, up 16% weekly.   

   On Friday, at 3:30 p.m., the CFTC will update its Commitments of Traders 
data. Last week's numbers showed that the managed-money traders were net 
sellers of 16,000-plus contracts, which reduced their net long carry to 81,610. 
Their record stands at 108,788 contracts. 

   Crude Oil is higher this morning after President Trump rejected a new story 
indicating a lifting of certain sanctions on Iran. With that, Saudi Arabia 
resumed oil tanker loadings from its Red Sea port of Yanbu after restarting 
operations on the East-West Pipeline. In fact, crude oil exports from the 
Middle East have rebounded in September to 16.328 million barrels per day, the 
highest since the US-Israeli war with Iran started in late February.

   For today close-in support for December Cotton stands at 7800 and 7745, with 
resistance around 8010 and 8075. This morning's estimated volume is 18,850 
contracts.

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




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