DTN Morning Cotton Commentary          12/09 07:13

   Cotton Awaits Data 

   The cotton market is gingerly higher Tuesday morning.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is gingerly higher Tuesday morning as it considers the 
expiration price for spot December, USDA's supply-demand update, and the 
potential action of the Federal Reserve.

   The December 2025 contract expired Monday at 61.88 cents, well below the 
March contract's current price. Some technical traders believe such 
switch-of-contract gaps will often be filled. 

   Tuesday at noon EST, USDA will issue updated supply-demand tables via its 
December WASDE. Last release, the tabulators increased the U.S. 2025 crop some 
900,000 bales, as well as reporting higher domestic and world carryouts. 
Tuesday's expectations are calling for slight increases in all of the 
aforementioned categories.

   The Federal Reserve will meet Tuesday and announce on Wednesday at 2 p.m. 
EST any action it will take regarding U.S. interest rates. According to the CME 
Fedwatch Tool, the odds for a cut have moved from an earlier 40% chance to the 
current 87% for a quarter-point reduction. 

   This Thursday at 8:30 a.m. EST USDA will release another catch-up export 
sales report, covering the period from Nov. 13. Monday's backlogged report 
(Oct. 30) had net sales for both crop seasons totaling 292,000 bales, with 
weekly shipments of 136,000 bales. 

   Daily chart support for March cotton stands at 63.60 cents and 63.00 cents, 
with resistance hovering about 64.50 cents and 65.00 cents. Tuesday morning's 
estimated opening volume is 6,455 contracts.

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




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