Cotton In Limbo Friday

Without any fundamental news, along with the unfolding harvest, the cotton market is suspended between action and inaction. Earlier this week, December cotton posted a new contract low, then attempted to zoom higher. However, it has thus far failed to capitalize on that recovery. In fact, open interest is approaching a massive high level of nearly 300,000 contracts,

With that, the most recent U.S. fundamental data continues to indicate the U.S. crop is in good shape. However, its export sales pace, thus far, is the slowest in 10-plus years. Sales had reached 36% of the USDA forecast versus a five-year average of 53% for this point in the marketing year.

Under the terms of President Donald Trump’s initiative to end the war in Gaza, Israel’s military is expected to withdraw from Gaza within 24 hours. The agreement follows a brutal 2-year war that has sparked global outcry It remains unclear how the agreement will usher in a period of lasting peace. The cessation has crude oil under pressure today.

Pakistan continues to suffer from massive flooding problems, which is creating havoc with crops, livestock, and people. Of late, Pakistan has been a noted buyer of U.S. cotton.

The potential $15 billion payments in farmer aid was expected to be announced this week. However, a White House spokesperson said Thursday that the plan is on hold due to the shutdown.

There will be no written afternoon comments Friday.

Daily chart support for December cotton stands at 64.45 cents and 64.00 cents, with resistance at 65.25 cents and 66.00 cents. Friday morning’s estimated volume is 5,450 contracts.

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