DTN Morning Cotton Commentary          08/08 07:31

   Cotton Up, Sees Worsening Texas Crop 

   The cotton market has resumed its upside attack as traders see the Texas 
crop in a dire state.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market has resumed its upside attack as traders see the Texas 
crop in a dire state. Adding to their attitudes was last week's U.S. Drought 
Monitor which indicated the dry conditions are seizing deeper. Although the 
immediate forecast does allow for some rain in the Texas Panhandle, there is 
none for West Texas. The longer-term outlooks call for above normal 
temperatures and below normal chances for precipitation for that region. 

   CFTC issued its Commitments-of-Traders report Friday. Its data showed that 
the managed-money funds were net sellers (1,500 contracts) of cotton last week. 
Their action reduced their net long to 31,829 contracts.

   Over the weekend, the U.S. Senate passed its $430 billion Inflation 
Reduction Act. The legislation reportedly will ease inflation via climate 
change spending, tax increases and changes to healthcare. It also provides $80 
billion to the IRS for stepped-up collections.

   Crude oil prices are lower today as recession fears hurt demand outlook, 
plus faltering demand from China, the world's top crude importer. The latest 
consumption numbers showed imports of 8.79 million barrels per day of crude in 
July, 9.5% lower than a year ago.

   Monday afternoon USDA will issue its crop rating data. The readings are 
expected to show the U.S. Crop slightly worsening. The report is out at 4 p.m. 
EDT.

   On Friday, USDA will update its monthly supply-demand numbers. The previous 
report showed a million-bale decline in production, but nearly an equal offset 
decline in exports. Hence, carryout remained virtually the same.

   For Monday, support for December cotton is at 9460 cents and 9452 cents, 
with resistance at 9800 cents and 9950 cents. Monday morning's estimated volume 
is 2,673 contracts. 

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




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