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DTN Morning Cotton Commentary          12/10 07:39

   Cotton Wobbly on Trump, Crop Report  

   The cotton market is being victimized by the growing drama within the Trump 

By Keith Brown
DTN Cotton Contributing Analyst

   The cotton market is being victimized by the growing drama within the Trump 
Administration. Over the weekend there was negative news from the Muller 
investigation as it relates to possible campaign finance violations. This news 
has sent the financial market seesawing overnight and into Monday morning. 
Certainly, such turbulence is making it difficult for the cotton to focus 
solely on its fundamentals of supply and demand. Thus, the cotton market has 
traded both sides of Friday's close. We might mention it was one week ago the 
market looked promising as the U.S. and China agreed to work out their trade 
differences. However, since that time there was an international event, the 
arrest of a top-ranking Chinese technology official in Vancouver at the request 
of the U.S., which has muddied the U.S.-China relationship. It will be an 
interesting week, politically speaking.  

   Tuesday USDA will publish the December crop report. It is expected the 
government will again reduce the size of the U.S. crop. Traders see U.S. 
carryout at 4.16 million bales, versus November's 4.64 million bales. The range 
of guesses span 4.0 million bales to 4.64 million bales. Current production for 
the 2018 crop is projected to be 18.22 million bales compared to November's 
18.41 million bales. The estimates range from 18.0 to 18.5 million bales. World 
ending stocks are projected to be 72.33 million bales against November's 72.61 
million bales. However, since the accumulation of these numbers, it is thought 
the Indian and Pakistani crop have are worsened. It would take some very 
bullish numbers to overcome the growing negativity of the U.S.-China trade war. 
In fact, we're not sure the report can come out that positive, but at noon 
Eastern tomorrow, we will see.

   Close-in support for March cotton lies at 79.70 cents and 78.60 cents, with 
resistance at 81.15 cents and 81.80 cents.  

   Keith Brown can be reached at commodityconsults@gmail.com


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