Cotton Sleeps Undisturbed

The cotton market continues to trade its path of least resistance, which is sideways to nowhere. Thursday’s poor showing in export sales, plus a strong U.S. Dollar snuffed out any attempt to rise in bullish designs. Additionally, with the approach of month’s and quarter’s end, trading could become all the more turbulent and two-sided.

This morning a new reading of the PCE, personal expenditures index, will be published. Supposedly, this is a key inflation indicator that the Federal Reserve watches. Estimates call for the PCE to show an inflation pace of 0.2% month-on-month and 2.9% on an annualized basis.

Today at 3:30 p.m. EDT, the CFTC will issue its Commitment 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.

The 6- to 10-day weather outlooks calls for above normal temperatures for Texas but normal reading for the Southeast and the Delta. Rain-wise, Texas looks to have below normal chances, the U.S. Delta, normal opportunities, and the Southeast should see slightly above normal precipitation possibilities.

Daily chart support for December cotton stands at 66.00 cents and 65.30 cents, with resistance at 66.60 cents and 67.25 cents. Friday morning’s estimated volume is 3,775 contracts.

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