DTN Closing Cotton            07/07 13:52

   Cotton Flirts With Limit-Up

   The cotton market was dramatically higher Tuesday, nearly limit-up, amid 
questionable growing conditions across the Northern Hemisphere and speculative 
short-covering. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market was dramatically higher Tuesday, nearly limit-up, amid 
questionable growing conditions across the Northern Hemisphere and speculative 
short-covering. We also note that China's President Xi is scheduled to come to 
Washington in late September for a state visit.

   Some traders suggest that the U.S. crop is worsening and is lower than 
USDA's latest Crop Progress report rating of 46% good to excellent. 
Accordingly, the 6- to 10-day forecast (July 12-16) shows above-normal 
temperatures for most of the U.S. Cotton Belt. Rainwise, West Texas looks to 
have normal chances, while the Southeast and the Delta have slightly 
above-normal rain opportunities.

   This Thursday is the expiration of the July contract. Its final settlement 
could adversely impact cotton's daily continuation charts with a 
switch-of-contract gap.

   Also on Thursday, USDA will issue fresh export sales numbers. Last week saw 
net sales of 42,000 bales, off 42% weekly, and down 70% on the four-week 
average. Shipments tallied 219,000 bales, off 27% weekly. The report is out at 
8:30 a.m.

   The CFTC's latest Commitment of Traders data showed a hefty reduction in the 
net-long position of the managed-money funds. The reduction is likely causing 
additional short covering today.

   Crude oil prices traded some 2% higher today after Iran attacked a tanker 
from Qatar near the Strait of Hormuz. The attack near the waterway reaffirms 
the fragility of the U.S. and Iran's interim peace agreement, as ongoing 
negotiations unfold.

   For Tuesday, July closed at 76.94 cents, up 299 points; December closed at 
81.29 cents, plus 299 points; and March 2027 finished at 82.68 cents, up 296 
points. Tuesday's estimated volume was 88,745 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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