DTN Morning Cotton Commentary

DTN Morning Cotton Commentary

The cotton market is again fractionally higher this morning, although it is not that far from sinking into contract lows. Traders are concerned over the possibility of a Russia/China/ India trading alliance, plus all the “court confusion” over the Trump tariffs.

Due to the Labor Day observance, this week’s export sales have been pushed back to Friday. Last week saw net sales of 179,000 bales, mostly for Vietnam, with shipments of 112,900 bales again mainly to Vietnam. The numbers will be out at 8:30 a.m. EDT.

Also on Friday, the Labor Department will issue its jobs data for August. Non-farm payrolls are expected to see a gain of 75,000 jobs, after last month’s controversial 73,000 job gain. The unemployment rate is expected to be 4.3%.

The U.S. dollar is steady-to-higher today amid a weakening labor market. That notion has heightened expectations for a cut in interest rates this month. With that, Friday’s jobs report will be crucial in setting the tone for said reduction. Traders are pricing in a near-100% chance of the Fed cutting interest rates later this month, up from 89% a week ago, CME FedWatch showed.

Daily chart support for December cotton stands at 65.75 cents and 65.00 cents, with resistance at 66.75 cents and 67.25 cents. Thursday morning’s estimated volume is 4,035 contracts.

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