Cotton Seasonally Higher

The cotton market is materially higher Wednesday as some traders sense the seasonal low has been nailed. In addition, the market is oversold with a hefty and overextended net-short speculative position. Lastly, the Trump/Xi trade talks are nearly centerstage.

The Federal Reserve will announce its monetary policy today at 2 p.m. EDT. Traders are anticipating a reduction of one-quarter point in interest rates, plus an end to the quantitative easing policy. 

The U.S. government shutdown stands at day 29. This weekend, being the first of the month, could see disruption in various social support programs such as SNAP with its 45 million recipients. Thus, pressure is mounting on the Democrats to make the vote.

The 6- to 10-day weather outlook (Nov. 3-7) calls for above-normal temperatures for Texas and below-average temperatures for the Delta and the Southeast. Rain-wise, Texas looks to have much below-normal chances, while the Delta and the Southeast will see normal opportunities.

Daily chart support for December cotton stands at 64.70 cents and 64.00 cents, with resistance at 66.65 cents and 67.10 cents. Wednesday morning’s estimated volume is 15,745 contracts.

Note: There is a possibility there will not be Closing Cotton Comments for Oct. 29. We apologize for any inconvenience.

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