DTN Morning Cotton Commentary          09/14 07:18

   Cotton Futures Fall as Surging Crude Oil, Fed Rate Fears, and WASDE Hangover 
Weigh on Market

   Overnight, the cotton market is lower, upended by the surrounding markets.

Keith Brown
DTN Contributing Cotton Analyst

   Overnight, the cotton market is lower, upended by the surrounding markets. 
That is, sharply higher energy prices, fear of Fed action this week, plus a 
bearish WASDE "hangover" are collectively contributing to cotton's negativity. 

   Last Friday, the CFTC unveiled fresh Commitment of Traders calculations. 
Those numbers revealed a reduction in the long position held by the 
managed-money funds. Overall, they net sold 7,806 positions, reducing their 
net-long carry to 100,170. For context, they previously held 107,976 contracts 
versus their record of 108,778.  

   This afternoon at 4 p.m. EDT, USDA will grade the 2026 crop. Last week, the 
crop was rated at 34% good/excellent compared to the previous rating of 38%. 
Last year, the ratings were 55% good/excellent. 

   This week, the Federal Reserve will meet on Tuesday and Wednesday to discuss 
interest rates. Recent jobs data and inflation reports, plus high-flying crude 
oil, have some traders expecting a quarter-point hike in rates. 

   Saudi Arabia closed its East-West pipeline after drones launched from Iraq 
damaged it. The pipeline, which can carry 7 million barrels per day, has played 
a key role in easing the severe oil supply disruption triggered by the Iran 
war. Moreover, a diplomatic meeting between Iran and the Gulf Arab states to 
discuss the situation in Hormuz was abruptly postponed after the pipeline 
attack.

   For Monday, close-in support for December Cotton stands at 84.25 cents and 
83.75 cents, with resistance around 87.20 cents and 88.15 cents. This morning's 
estimated volume is 21,475 contracts.

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




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