DTN Morning Cotton Commentary          07/28 07:16

   Cotton Slams Into Turnaround-Tuesday 

   After a bearish-defying Monday, the cotton market has completely reversed, 
and then some on Tuesday. 

Keith Brown
DTN Contributing Cotton Analyst

   After a bearish-defying Monday, the cotton market has completely reversed, 
and then some on Tuesday. Traders continue to see a strengthening U.S. dollar, 
along with weaker outside metals, energies, and grain markets. Also, Monday's 
cotton condition numbers showed the crop somewhat improving.

   USDA issued its crop condition data Monday. That weekly report showed 46% of 
the domestic 2026 was rated good to excellent, up from 45% the previous 
reading, but still below the year ago pace of 55%. The five-year average for 
this date is 49% good to excellent. Texas was 34% good to excellent, up from 
30% last week, but still down from 50% a year ago. Texas' five-year average is 
37%. The crop at-large is progressing at a normal pace, with 45% setting bolls 
versus 42% a year ago, and compared to the five-year average for this date of 
45%.

   Tuesday, the Federal Reserve is meeting to discuss U.S. interest rates, 
under its new chairman. That decision will be publicly conveyed at 2 p.m. EDT 
Wednesday. Currently, there is a 66% chance the central bank will not do 
anything. However, some governors would like to hike rates immediately.  

   Crude oil continues to extend lower Tuesday. The pause in fighting between 
the US and Iran is raising hopes for a de-escalation in the Middle East 
conflict. Supposedly, Tehran has rejected reports that it has agreed to a 
10-day ceasefire. Nonetheless, President Trump is still considering a "massive 
attack" on Iran.  

   Chart support for December cotton stands at 79.45 cents and 78.75 cents, 
with resistance around 81.15 cents and 82.05 cents. Tuesday morning's estimated 
volume is 7,484 contracts,

    

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




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