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DTN Morning Cotton Commentary          03/23 05:59

   Cotton Moves Lower with Other Markets

   Markets in general, including cotton, were lower Friday morning on the 
ripple effects of an escalating trade war between the United States and China. 
Old-crop May was down 0.53 while new-crop December also dropped 0.53. 

By Darin Newsom
DTN Senior Analyst

   OUTSIDE MARKETS: The Dow Jones Industrial Average closed 724.42 points 
(2.9%) lower at 23,957.69, the NASDAQ Composite lost 178.61 points (2.4%) to 
7,166.68, and the S&P 500 dropped 68.24 points (2.5%) to 2,643.69 Thursday. 
DJIA futures were 190 points lower early Friday morning. Asian markets closed 
lower with Japan's Nikkei 225 down 974.13 points (4.5%), Hong Kong's Hang Seng 
falling 761.76 points (2.5%), and China's Shanghai Composite losing 110.72 
points (3.4%). European markets were trading lower with London's FTSE 100 down 
70.29 points (1.0%), Germany's DAX losing 248.14 points (2.0%), and France's 
CAC 40 off 98.95 points (1.9%). The euro was 0.0027 higher at 1.2331 while the 
U.S. dollar index was 0.12 lower at 89.70. June 30-year T-Bonds were 4/32 
higher at 144'28 while April gold gained another $14.80 to $1,342.20. Crude oil 
was $0.20 higher at $64.50 as Brent crude added $0.12 to $69.03.

   General Comments: 

   With markets in general falling overnight, it was hard to picture cotton 
being able to generate much of a rally. One of the concerns of the market is 
the recent build of the net-long futures position held by noncommercial 
traders, particularly after the Dow Jones Industrial Average lost more than 700 
points Thursday and DJIA futures traded 100 points lower again overnight. With 
the carry in old-crop cotton May-to-July futures spread continuing to 
strengthen, increased noncommercial long-liquidation could be seen. 
Fundamentally, weekly export sales and shipment numbers for the week ending 
Thursday, March 15 will be released Friday morning. However, these aren't 
expected to add much to the market given they are already more than two weeks 
old in some cases. Technically, neither old-crop May nor new-crop December are 
in position to challenge support at 4-week lows of 81.52 and 75.51 

   Darin Newsom can be reached at darin.newsom@dtn.com 

   Follow Darin on Twitter @DarinNewsom 


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