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DTN Closing Cotton            10/22 14:51

   Cotton Sharply Higher on Production Fears

   December cotton closed up 200-plus points on Monday as traders finally 
awaken to the fact yields across the cotton belt will be greatly diminished 
into late harvest.


By Keith Brown
DTN Cotton Contributing Analyst

   

   December cotton closed up 200-plus points on Monday as traders finally 
awaken to the fact yields across the cotton belt will be greatly diminished 
into late harvest. After being tormented all season by droughts, rains, 
hurricanes and freezes, the crop will be dramatically curtailed in USDA's 
November supply-demand report. Additionally, Monday's trade saw all contracts 
close above the 80-cent mark for the first time since summer. Thus, not only 
was Monday's settlement a financial improvement to the market, but a 
psychologically boon as well. 

   To that end, Monday's estimated volume was 40,500 contracts, the strongest 
volume since the October 1's low of 47,700 contracts. We also note open 
interest is on the rise, suggesting the sold-out speculators are wading back 
into the long side of market. 

   Monday afternoon, USDA will report on the pace of harvest and the condition 
of the crop. Last week, Georgia was rated at 54% poor, very poor. Texas too may 
see some backwardation in its crop due to the wet, snow, and freeze conditions 
of last week. 

   December cotton settled 80.02 cents, up 210 points, March was 81.45 cents, 
plus 209 points, and Red December finished 77.58 cents, up 90 points. 

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


(BE)

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