Cotton Seeks Direction

Despite its exhaustive bearish trend, the cotton market is attempting to stabilize. With so many of its negative fundamentals known and essentially vetted, traders are looking to the horizon hoping to see the making of a different direction.  

Delivery for the October cotton started Wednesday. There were no notices issued. Its delivery period runs through Oct. 9.

Thursday, at 8:30 a.m. EDT, USDA will release its weekly export sales data. Last week’s tally showed net sales of 186,000 bales, which was up 44% weekly. Shipments were 120,500 bales, down some 8% from the previous week. 

Also Thursday, traders will see Q2 GDP data as well as new jobless claims. The U.S. Labor Market is a huge concern to the Federal Reserve regarding its future interest rate policy.

On Friday, the CFTC will issue its Commitments of Traders report. Last week’s calculation, per the Tuesday settlement, the managed-money funds had brought back some 9,800 positions, thereby reducing their overall bearish stake to 59,061 contracts. Their record bearish carry is slightly below the 80,000-contract mark.

Daily chart support for December cotton stands at 66.00 cents and 65.50 cents, with resistance at 66.75 cents and 67.45 cents. Wednesday morning’s estimated volume is 4,025 contracts.

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