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DTN Closing Cotton            10/17 13:51

   Cotton Remains Locked Sideways in Nowhere Trade

   December cotton finished moderately lower Wednesday on an estimated volume 
of 20,200 contracts traded.


By Keith Brown
DTN Cotton Contributing Analyst

   

   December cotton finished moderately lower Wednesday on an estimated volume 
of 20,200 contracts traded. The ICE Futures have been the recent ire of 
producers and speculators alike for its unwillingness to respond bullishly to 
the widespread devastation of Hurricane Michael. Nonetheless, the market 
appears to be weighed down with the international concerns of trade and 
tariffs, and the uncertainty of just how much loss actually occurred to the 
Southeastern cotton crop. 

   Even as the market wobbles about, a rise in open interest suggests new 
buyers have entered the trade. Of course, the negative aspect of that 
participation is if those speculators (whom probably bought the market because 
of the storm) ever become disappointed, they may liquidate, which will usher in 
more selling. 

   Another negative is the on-going strength of the U.S. dollar. Recent strong 
earnings from several major companies may prompt the Federal Reserve to hike 
interest rates in its December meeting. Additionally, the brewing spat with 
Saudi Arabia has global traders flocking to the dollar in something of a 
flight-to-quality move driving it higher as well. 

   Thursday, USDA will issue its weekly sales and exports reports at 8:30am 
eastern time. Of late, sales have been suffering, although this season's pace 
is running ahead of the government's 2018-19 forecast. 

   December cotton closed Wednesday at 7792, down 41, March cotton was 7944, 
down 34, and Red December finished 7690, up 10 points. 

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


(BE)

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