DTN Morning Cotton Commentary          10/14 07:19

   Cotton Pushes Past WASDE

   Cotton prices climb as traders anticipate smaller crop, inflation data.



Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is somewhat higher Wednesday morning as traders are 
looking beyond USDA's negative supply-demand update of last week. Traders are 
likely thinking the 2026 crop is indeed below the 13.44mb level promoted by 
USDA. Also, traders are awaiting this week's inflation numbers as well as 
exports-sales and Friday's CFTC report. 

   On Tuesday, the USDA issued its holiday-delay crop progress reports. Its 
numbers showed that 34% of the U.S. cotton crop was rated good/excellent, up 
from 33% of the previous week. However, the reading is still below the 
five-year average for this date at 40%. Texas was 19% good/excellent, up from 
15% last week. Her five-year average is 27%. Georgia was 52% good/excellent, 
down from 56% last week and dead-on her four-year average. The report also 
showed 31% of the crop had been harvested versus 23% last week, with the 
five-year average at 28%. The crop had 82% with bolls open versus the 74% level 
of last week.        

   At 8:30 a.m. EDT Wednesday, new CPI (consumer inflation) numbers will be 
issued.  Traders are expecting U.S. inflation to rise, mainly because of higher 
energy prices, while underlying inflation should remain more moderate. Headline 
inflation y/o/y is looking between 3.6 to 3.7 percent. The previous reading was 
3.4%.  

   Thursday, new PPI (wholesale inflation) numbers will be released. Its 
numbers are expected to be elevated. Headline monthly PPI is estimated at 0.5% 
versus the previous 0.4%.

   Weekly exports-sales will be released this Friday. Highlights from last 
week's report included net combined seasonal sales of 221,128 bales. That 
amount was below the previous 241,727 bales, but was higher than the four-week 
average. Cumulative sales for 2027/28 have reached 44% of the USDA forecast 
versus a five-year average of 53% for this point in the marketing year. 
Shipments totaled 161,588 bales, up from 149,507 the previous week.

   For Wednesday close-in support for December Cotton stands at 7925 and 7875, 
with resistance around 8245 and 8290. This morning's estimated volume is 16,188 
contracts.

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




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