DTN Morning Cotton Commentary          10/21 07:19

   Cotton Trades Sideways, Awaits Bullish News

   The cotton market continues to traverse sideways as it appears to be waiting 
for some sort of bullish shoe to drop. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market continues to traverse sideways as it appears to be waiting 
for some sort of bullish shoe to drop. Supposedly, the managed funds have shut 
off their liquidation selling, and the 2026 harvest is briskly proceeding. 
Traders will assess Thursday's export sales, Friday's CFTC update and whatever 
action comes out of the Federal Reserve's meeting next week.

   Thursday at 8:30 a.m. EDT, USDA will issue its weekly export sales report. 
Highlights from last week's data saw combined seasonal net sales of 154,074 
bales, which were below the 221,128 bales from last week. Cumulative sales for 
2026/2027 have reached 45% of USDA's forecast versus a five-year average of 54% 
for this point in the marketing year.

   Then on Friday at 3:30 p.m. EDT, the CFTC will update its Commitments of 
Traders numbers. Last week, the managed-money funds net bought 1,862 positions 
increasing their net-long carry to 65,699 contracts.

   Crude oil is higher Wednesday morning as continued worries over Middle East 
supply disruptions keep the market on edge. Additionally, there are numerous 
attacks on tankers near the Strait of Hormuz and Saudi energy facilities. 
Interestingly, November WTI crude expired Tuesday at 101.79, leaving a 
switch-of-contract gap with the next in line December contract. Often, such 
gaps are filled by the new front-end contract in a strong technical push.

   Next week, the Federal Reserve will meet to discuss and perhaps act on U.S. 
interest rates. Recent inflationary data has been running high, and the central 
bank may feel compelled to increase rates. That potential decision will be 
announced Wednesday, Oct. 28.

   For Wednesday, close-in support for December cotton stands at 79.60 cents 
and 79.10 cents, with resistance around 82.00 cents and 82.45 cents. Wednesday 
morning's estimated volume is 8,420 contracts.

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




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