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DTN Morning Cotton Commentary 04/20 08:05
Cotton Higher in Seesaw Trade
Cotton is higher Tuesday morning as the market's trend remains intact,
encouraging new buyers.
Keith Brown
DTN Contributing Cotton Analyst
Cotton is higher Tuesday morning as the market's trend remains intact,
encouraging new buyers. Traders are also seeing outside markets such as lumber,
copper, the grains, and crude skyrocket, which is influencing them to try to
rally cotton.
Monday's weekly crop progress indicated some 11% of the U.S. cotton crop was
planted as of Sunday. That number was even with a year ago and up from the
5-year average of 9%. Texas was 16% planted versus 17% a year ago and a 5-year
average of 13%. The drought in Texas continues to be a major concern. To that
end, both the 6-10 day and 8-14 day forecasts call for above normal
temperatures and below normal precipitation across West Texas.
Technically, the market continues to push higher to test certain overhead
resistance. That is, from its February high to its March/April low, a 50%
retreatment for the July contract lies at 8722. Interestingly, the December
contract has already hurdled its 50% level and is now attempting to pierce its
62% resistance at 83.95 cents. Closing above those either of levels would
encourage additional speculative buying.
For Tuesday, support for May cotton is 83.00 cents and 82.10 cents, with
resistance at 85.25 cents and 87.40 cents. The estimated morning volume is
6,591 contracts.
Keith Brown can be reached at commodityconsults@gmail.comor by calling (229)
890-7780.
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