DTN Morning Cotton Commentary          07/08 07:14

   Cotton Lower, Overbought, and Iran 

   The cotton market has somewhat retreated Wednesday amid its overbought 
condition and the renewed hostilities with Iran. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market has somewhat retreated Wednesday amid its overbought 
condition and the renewed hostilities with Iran. Since Sunday evening, December 
cotton has spiked some 450 points higher with little hesitation based on 
weather concerns. In addition, just last night President Trump said the 
ceasefire with Iran is over and ordered heavy strikes in retaliation for Iran's 
attacking cargo ships in the Hormuz Strait.

   Thursday, the July cotton contract expires. Its final settlement could 
adversely impact cotton's daily continuation charts with a switch-of-contract 
gap.

   Also on Thursday, USDA will issue fresh export sales numbers. Last week saw 
net sales of 42,000 bales, off 42% weekly, and down 70% on the four-week 
average. Shipments tallied 219,000 bales, off 27% weekly. The report is out at 
8:30 a.m. EDT.

   On Friday, USDA will issue its latest supply-demand update, via the July 
WASDE. Last month the tabulators upped U.S. cotton production to 9.80 million 
bales. The report is out at noon EDT.

   Also Friday afternoon, the CFTC will release new Commitments of Traders 
data. The previous report showed funds had net-bought some 6,400 positions, 
reducing their net-long carry to 31,985 contracts. Given this week's upward 
spike in prices, their position is likely to be further reduced.

   Chart support for December cotton stands at 78.60 cents and 78.00 cents, 
with resistance around 81.60 cents and 82.75 cents. Wednesday morning's 
estimated volume is 17,780 contracts.

    

    

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




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