Cotton Higher on Short-Covering Friday

Although Thursday’s June WASDE was uninspiring, it held nothing bearish. In addition, the weekly export data was friendly. Also, Friday morning there is some positive euphoria building over the possible end of the U.S./Iran War.

Friday at 3:30 p.m. EDT, the CFTC will update its Commitments of Traders numbers. Last week, the already net-long funds sold some 1,800 positions, reducing their bullish carry to 52,402 contracts.

Next week, USDA will issue its Crop Progress report on Monday at 4 p.m. EDT. Last week’s data showed the U.S. cotton crop was rated 53% good to excellent, while the plantings were 77% complete. That pace equaled the five-year average.

Crude oil is lower Friday as there are high hopes for an end to the U.S./Iran War. Reportedly the two sides could sign a peace deal in Switzerland this Sunday. Some components of the deal include the lifting of oil sanctions by the U.S. and a commitment from Iran to reopen the Strait of Hormuz within 30 days. The 14-point document dictates that final negotiations will not begin until the release of half of Iran’s frozen funds, the suspension of Iran’s oil sanctions, and the lifting of the naval blockade. Additionally, all American forces would need to withdraw from Iran and the U.S. and its allies would need to present reconstruction plans for Iran worth at least $300 billion.

Chart support for December cotton stands at 75.00 cents and 74.50 cents, with resistance around 77.50 cents and 79.35 cents. Friday morning’s estimated volume is 15,870 contracts.

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