Cotton “Steadies” In the Storm

The cotton market is slightly higher this morning amid all of the production “bloodletting” that occurred in the Chicago Grains yesterday. Essentially, USDA bearishly tweaked virtually every supply-demand category for grains in the January WASDE, which likely discouraged cotton from trading better.  

There are several key economic reports this week, including today’s CPI (consumer inflation), Wednesday’s PPI (wholesale inflation), and Thursday’s weekly exports-sales and retail sales. The Fed will be assessing the data for future interest rate considerations.  

With that, the Federal Reserve itself is under Department of Justice scrutiny for the cost overruns (now some $2.5 billion) for the renovation of its office building complex. 

Crude oil is higher today, as there are heightened concerns surrounding major ‍producer Iran, and potential supply ‍disruptions overshadowed the prospect ‍of increased crude supply from Venezuela. Traders are pricing in some price protection. The top political topics that are dominating the energy situation include Iran, Venezuela, Russia-Ukraine, and Greenland.

Chart support for March Cotton stands at 6460 and 6385, with resistance hovering about 6560 and 6625. This morning’s estimated opening volume is 11,689 contracts.

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