DTN Morning Cotton Commentary          07/30 07:43

   Cotton Higher on the Down Dollar Thursday

   The cotton market is materially higher Thursday morning as the U.S. dollar 
is displaying weakness. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is materially higher Thursday morning as the U.S. dollar 
is displaying weakness. Wednesday's Fed announcement did not raise rates and, 
in fact, it left some in the financial community somewhat confused with Fed 
policy. Traders are also awaiting Thursday's export sales, Friday's CFTC 
update, and whatever unfolds in the Middle East this weekend.

   USDA just released its weekly export sales report with the following 
numbers: "Net sales of Upland totaling 29,700 RB for 2025/2026--a 
marketing-year low--were down 42 percent from the previous week and 41 percent 
from the prior 4-week average. Increases primarily for Vietnam (14,200 RB, 
including 100 RB switched from Japan and decreases of 800 RB), Pakistan (5,300 
RB, including decreases of 100 RB), India (3,400 RB, including 400 RB switched 
from Pakistan and decreases of 1,300 RB), China (3,200 RB), and Mexico (2,500 
RB), were offset by reductions for Honduras (1,600 RB), Japan (1,400 RB), 
Bahrain (200 RB), and Bangladesh (100 RB). Net sales of 352,400 RB for 
2026/2027 primarily for Vietnam (245,500 RB), India (42,200 RB), Pakistan 
(18,400 RB), Honduras (17,700 RB), and El Salvador (13,800 RB), were offset by 
reductions for Mexico (2,500 RB) and Nicaragua (1,500 RB). Exports of 233,800 
RB were down 15 percent from the previous week and 1 percent from the prior 
4-week average. The destinations were primarily to Vietnam (78,600 RB), 
Pakistan (49,400 RB), Indonesia (18,000 RB), Turkey (12,700 RB), and Mexico 
(12,400 RB). Net sales of Pima totaling 2,700 RB for 2025/2026 were down 17 
percent from the previous week, but up 6 percent from the prior 4-week average. 
Increases were reported for India (1,400 RB), Pakistan (800 RB), and Bangladesh 
(500 RB). Net sales of 5,500 RB for 2026/2027 were reported for Peru (2,500 
RB), India (1,500 RB), Bangladesh (1,300 RB), and Thailand (200 RB). Exports of 
4,500 RB were down 43 percent from the previous week and 64 percent from the 
prior 4-week average. The destinations were India (4,500 RB) and Thailand (100 
RB)."

   Friday the CFTC updated its Commitments of Traders data. The results showed 
managed-money funds bought some 3,500 futures, further swelling their net-long 
position to 53,209 contracts.

   As mentioned, the U.S. dollar is somewhat listing, a result of the Federal 
Reserve keeping its policy interest rate on hold. In addition, 
post-announcements of Chair Kevin Warsh left markets guessing about how its 
rate-setting committee would resolve future decisions. Yet, the greenback is 
also slightly stiffer after the U.S. said it was conducting sustained air 
strikes in Iran.

   Chart support for December cotton stands at 79.20 cents and 78.70 cents, 
with resistance around 81.50 cents and 82.00 cents. Thursday morning's 
estimated volume is 9,274 contracts.

    

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




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