DTN Morning Cotton Commentary          02/09 07:24

   Cotton Toes The Line -- Maybe

   Friday's steep selloff has brought the cotton market to the brink of 
piercing its major weekly support. 

Keith Brown
DTN Contributing Cotton Analyst

   Friday's steep selloff has brought the cotton market to the brink of 
piercing its major weekly support. A trendline drawn for the planting 
intentions low of 2025 over to the November harvest low falls in about the 
60.80-cent level. A weekly settlement under that support likely opens the 
technical door for even lower prices. Thus, Tuesday's February WASDE update is 
all the more crucial.

   Friday, the CFTC will update its Commitments of Traders report. Its last 
release showed managed-money funds net-sold some 6,700 contracts, increasing 
their overall bearish position to 71,746. Their all-time record stands at 
81,000-plus net short. 

   As mentioned, Tuesday at noon EST USDA will issue its February supply-demand 
update. The average trade guess for the 2025-26 U.S. crop is 13.90 million 
bales, slightly lower than the 13.92 million seen in January. Exports are 
expected at around 12.17 million bales, down from January's 12.20 million, 
resulting in ending stocks at 4.21 million bales, up from 4.20 million. World 
production is expected around 119.52 million bales versus 119.43 million, and 
world ending stocks are expected at 74.56 million versus 74.48 million in 
January.

   Also, this week, the NCC is meeting and will release its 2026 acres survey 
on Feb. 12. Although not an official government report, nonetheless, it will be 
the first fundamental look at the potential for 2026.

   On Wednesday, traders will see the delayed U.S. payrolls report for January. 
Estimates call for a non-farm payroll number between 70,000 and 80,000 jobs, 
with an unemployment rate of 4.4%. Some analysts are now pricing an interest 
rate cut during the first half of this year, rather than in the second.  

   Chart support for July cotton stands at 64.50 cents and 64.00 cents, with 
resistance around 65.77 cents and 66.60 cents. Monday morning's estimated 
volume is 33,235 contracts.

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




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