Cotton Wobbles as it Eyes Iran, Weather

The cotton market is slightly higher Wednesday morning, but still huddling near its Sunday night opening of 81.51 cents. Traders continue to monitor weather and growing conditions across the U.S. Cotton Belt, as well as across the Northern Hemisphere, especially India. Anticipated reports for the balance of the week include Wednesday’s PPI data, as well Thursday’s export sales numbers and Friday’s CFTC update, among others. 

This Thursday, USDA will issue new weekly export sales data. Last week saw some improvement with current season sales of 66,500 bales, up 36%, and shipments of 230,000 bales, up 5%. Nonetheless, the overall U.S. cotton sales lag behind the five-year pace.

Also on Thursday, new monthly retail sales numbers, business inventories, and jobless claims will be published.

This Friday, the CFTC will update its Commitments of Traders information. Last week saw the managed-money funds had net-bought some 7,100 positions, further enhancing their net-long carry to 39,106 contracts.

Crude oil is trading higher Wednesday as U.S. forces carried out a fourth round of attacks on Iran. In addition, Washington has reinstated its naval blockade of Iranian ports near the Strait of Hormuz. Central Command reported the new wave of attacks targeted dozens of military assets near the Strait of Hormuz and along Iran’s coastline in a seven-hour operation.

Chart support for December cotton stands at 80.20 cents and 79.50 cents, with resistance around 83.00 cents and 83.50 cents. Wednesday morning’s estimated volume is 8,787 contracts.

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