DTN Morning Cotton Commentary          12/10 07:14

   Cotton Threads Higher

   The cotton market is attempting to build on its tiny turnaround, despite the 
presentation of negative supply-demand numbers Tuesday. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is attempting to build on its tiny turnaround, despite the 
presentation of negative supply-demand numbers Tuesday. In addition, traders 
have noticed that certain bearish speculators are reducing their positions and 
are also keen on today's announcement from the Federal Reserve.

   As mentioned, USDA released its monthly supply-demand numbers Tuesday. The 
data showed slightly higher U.S. production, less mill use and larger ending 
stocks versus November's report. Domestic production was pegged at 14.30 
million bales, reflecting better yields for most states across the Southeast 
and Delta. Ending stocks now stands at 4.5 million bales. The global 2025/2026 
balance sheet showed slightly lower production, consumption, and trade, but 
higher ending stocks compared to last month.

   The Federal Reserve will announce today at 2 p.m. EST, its latest action on 
U.S. interest rates. According to the CME FedWatch Tool, the odds for a cut 
have moved from an earlier 40% chance to the current 87% for a quarter-point 
reduction.

   Tuesday afternoon, the CFTC issued another back-logged Commitment of Trader 
report. The numbers revealed showed that the managed-money funds had bought 
back some 10,000 positions, and now stand net-short with 63,782 contracts. For 
context, their record negative position was 81,343 contracts. The next update 
will be this Friday afternoon.

   Thursday at 8:30 a.m. EST, USDA will release another catch-up export sales 
report, covering the period from Nov. 13. Monday's back-logged report (Nov. 6) 
had net sales for both crop seasons totaling 388,900, with weekly shipments of 
136,000 bales.

   Daily chart support for March cotton stands at 63.45 cents and 63.00 cents, 
with resistance hovering about 64.50 cents and 65.00 cents. Wednesday morning's 
estimated opening volume is 5,525 contracts.

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




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