DTN Morning Cotton Commentary          10/15 07:34

   Cotton Struggles to Breathe

   The cotton market continues to fall under the weight of fresh speculative 
selling, harvest pressure and the lack of timely information.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market continues to fall under the weight of fresh speculative 
selling, harvest pressure and the lack of timely information. The government 
shutdown has entered its 15th day, with no end in sight. In addition, there 
remains increased fears of an expanding trade war with China.

   Just Tuesday, President Donald Trump said he was considering terminating 
some trade ties with China, including in relation to cooking oil. The President 
said, "I believe that China purposefully not buying our Soybeans, and causing 
difficulty for our Soybean Farmers, is an Economically Hostile Act. We are 
considering terminating business with China having to do with Cooking Oil, and 
other elements of Trade, as retribution". Obviously, none of that bodes well 
for U.S. cotton.

   Crude oil is again lower today. Traders saw the International Energy 
Agency's prediction of a supply surplus in 2026 and trade tensions between the 
United States and China as wholesale bearish. Both WTI and Brent oil contracts 
closed at five-month lows on Tuesday. The IEA suggested the global oil market 
could face a surplus next year of up to 4 million barrels per day. Such cheap 
oil could enhance the production of synthetics over cotton in apparels.

   The U.S. dollar is somewhat lower today amid Tuesday's economic comments 
from Federal Reserve Chair Jerome Powell. The Fed Chair underscored the need to 
lower rate cuts in coming months to help the U.S. labor market.

   Daily chart support for December cotton stands at 62.60 cents and 62.00 
cents, with resistance at 64.20 cents and 64.50 cents. Wednesday morning's 
estimated volume is 8,710 contracts.

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




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