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DTN Closing Cotton 05/17 13:41
Cotton Wobbles Lower Friday
Despite expectations for a higher close Friday, the market could not
accommodate.
Keith Brown
DTN Contributing Cotton Analyst
Despite expectations for a higher close Friday, the market could not
accommodate. Yet, cotton's weakness was more about a lack of buying, rather
than new short selling. Ever since peaking in mid-February, the cotton market
has been on a downward spiral to the point of ignoring its historical seasonal
tendency of posting higher prices.
Friday afternoon at 3:30 p.m. EDT, the CFTC will update the position of the
managed-money funds. This is a keenly watched group by traders in general. Last
week, they had extended their net-short position, and currently stand at 13,000
contracts net bearish.
The U.S. Dollar Index was slightly higher Friday, but looks to close lower
on the week. Traders continue to anticipate the timing of the Federal Reserve
long-awaited rate cuts. Recently, there have been certain economic indications
suggesting inflation is starting to cool. Currently, the financial futures are
pricing in a 47-basis-point reduction, possibly by September.
On Monday afternoon, USDA will update the planting progress of the 2024
crop. Last week's pace of 33% was ahead of the 5-year average of 31%. The next
report should reflect a similar full-speed-ahead pace.
December cotton settled points off 16 for the week, down 186 on the month,
and minus 439 points on the year.
Friday, July was 75.89 cents, minus .35 cent; December finished at 74.97
cents, 22 points lower; March 2025 was 76.58, down 22 points. Friday's
estimated volume was 18,171 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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