DTN Morning Cotton Commentary          02/06 07:12

   Cotton Still Queasy 

   After numerous bouts of posting contract lows in recent days, the cotton 
market remains in a bearish funk Friday morning.

Keith Brown
DTN Contributing Cotton Analyst

   After numerous bouts of posting contract lows in recent days, the cotton 
market remains in a bearish funk Friday morning. Thus far, for the week, the 
market is off some 160 points, on massive volume sessions. Traders are 
simultaneously nervous and mesmerized by the record open interest accumulated 
at such a low ebb of prices.

   March options will expire Friday on the close. Current open interest for 
spot March is around 160,000 contracts. Spot March will enter its delivery 
period Feb. 23. Traders and hedgers will have to vacate the contract the 
preceding Friday to avoid the notice process. 

   Also, Friday at 3:30 p.m. EST, the CFTC will update its Commitments of 
Traders report. Its last release showed the managed-money funds had net sold 
some 13,000 contracts, increasing their overall bearish position to 65,000-plus.

   Next Tuesday, USDA will issue its February supply-demand update. There is a 
possibility the government tabulators will increase domestic ending stocks. 
Then on Thursday, Feb. 12, the NCC will release its 2026 acres membership 
survey. Although not an official government report, nonetheless, it will be the 
first fundamental look at the potential for 2026.

   Crude oil is lower again Friday, ahead of the U.S.-Iran talks. Both 
countries agreed to hold talks in Oman today amid heightened tensions as the 
U.S. builds up military forces in the Middle East. Regional nations are hoping 
to avoid a military confrontation that many fear could escalate into a wider 
war and disrupt the flow of oil.

   Chart support for March cotton stands at 61.25 cents and 60.60 cents, with 
resistance around 62.57 cents and 63.70 cents. Friday morning's estimated 
volume is 22,730 contracts.

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




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