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DTN Closing Cotton            09/23 13:39

   Cotton Nervously Lower, Awaits Exports

   The cotton market appears to be locked in supply and demand vise, which 
constricts its trading activity.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market appears to be locked in supply and demand vise, which 
constricts its trading activity. That is, the bullish fundamentals of a smaller 
crop, disruptive storm, and strong exports are being offset by weaker global 
demand. To the latter, the UK has announced a deeper COVID-19 shutdown until 
March 2021. It's expected the continent of Europe will follow in a similar way. 
In the U.S., certain medical experts are warning of a possible new COVID-19 
resurgence during the fall and winter. Naturally, such social constraints will 
hamper retail shopping, and thus apparel demand. 

   Thursday morning, USDA will issue its latest export sales data. Last week 
saw a massive sales number. China was the dominant buyer of 400,000 bales. 
Analysts believe it's trying to fulfill its phase-one obligation.

   Traders continue to monitor certain weather events. Remnants of Beta are 
expected to come across portions of the Southeast, bringing clouds and rains. 
Of course, the desire for producers is for clear skies and hot temperatures so 
the crop will fully develop. The last crop condition report had the 2020 crop 
pegged at 45% good to excellent, equaling its level of the prior week. However, 
this Monday traders are likely to see a setback in those tabulations. The 
10-year average for this time of year is 46% good to excellent.

   For Wednesday, December cotton closed at 65.25 cents, down 0.29 cent, March 
closed at 66.14 cents, down 0.33 cent and December 2021 cotton finished at 
65.85 cents, 0.10 cent lower. Estimated volume was 16,813 contracts.

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




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