Cotton Eases Lower

The cotton market is slightly lower today amid a wishy-washy crop update on Friday, a reported larger speculative net-short position, and a “dull” trade meeting in Madrid.

In quick summary, Friday’s USDA WASDE report tilted slightly bullish, with U.S. production and ending stocks both coming in below expectations. Still, there were no big surprises.

Also last Friday, the CFTC updated its Commitment of Traders data. Last week saw the managed-money funds sell-short an additional some 2,500 positions, swelling their overall net short carry to 68,905 contracts. Their record short position is shy of 80,000 contracts.

Traders are now gearing up for this week’s Federal Reserve’s interest rate decision on Sept. 17. The financial markets are pricing in a quarter percentage point cut with near certainty, although there are some looking for a half-point cut.

Chinese and U.S. government trade representatives are meeting for the fourth time in four months to seek a solution to their economic imbalances. The meeting in Madrid, Spain could lay the groundwork for a successful summit between head of state Xi and President Trump.

Crude oil is edging higher today given the Ukrainian drone attacks on Russian refineries. Additionally, President Donald Trump said he was prepared to impose sanctions on Russia if NATO nations don’t stop buying Russian oil. Ukraine launched a large attack with at least 361 drones targeting Russia overnight, sparking a brief fire at the vast Kirishi oil refinery in Russia’s northwest, Russian officials said on Sunday.

Daily chart support for December cotton stands at 66.10 cents and 65.90 cents, with resistance at 67.10 cents and 67.50 cents. Monday morning’s estimated volume is 2,735 contracts.

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