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DTN Morning Cotton Commentary          10/03 07:46

   Cotton Starts October Lower  

   The cotton market is commencing the fourth quarter with a slightly negative 
tone. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is commencing the fourth quarter with a slightly negative 
tone. However, the market remains in an extremely oversold condition, making it 
subject to a short-covering rally at any time. Yet there are meaningful 
obstacles to higher prices, such as harvest, higher interests and poor demand. 

   Monday afternoon at 4 p.m. EDT, USDA will issue its weekly crop progress 
data. Last week the cotton crop was 15% harvested versus its five-year average 
of 14%. Hurricane Ian did cut across the mid-Atlantic states, but as of now no 
real damage assessment has been made.

   OPEC will meet this week to decide on potential production cuts. In 
anticipation of this action, crude oil, and its related markets, are sharply 
higher Monday morning.

   The CFTC issued its Commitments of Traders Report last Friday. The data is 
as of the week ending September 27. The numbers showed that the managed-money 
funds were net long 41,183 contracts after net selling 910 contracts. For some 
perspective, earlier in the year at their peak, that group was net long some 
90,000 contracts.

   According to Cotlok, the Liverpool-based research firm, the amount of global 
cotton surplus thus far in the 2022-23 season stands at 452,000 tonnes. That is 
up from its August estimate of roughly 12,000 tonnes. Overall, the tabulators 
reduced consumption by 500,000 tonnes due to lower demand in Turkey and India, 
that weakness is helping to offset the lower harvests expected in those two 
countries.

   Monday, support for December cotton is at 8300 cents and 8250 cents, with 
resistance at 8670 cents and 8960 cents. Monday morning's estimated volume is 
5,486 contracts.

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




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