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DTN Morning Cotton Commentary          07/23 08:16

   Cotton Higher Despite Ratings 

   The cotton market is higher Tuesday.

By Keith Brown
DTN Cotton Correspondent

   The cotton market is higher Tuesday. Monday, USDA published its weekly crop 
condition data, and that information indicated the crop is sitting at 60% 
good/excellent, a four point improvement over last week. Additionally, this 
current good/excellent rating is up 21% over last year, and up 11% on the 
ten-year average. The top two producing states, Texas and Georgia, stood at 58% 
and 60% good/excellent respectively. The number for Texas sounds especially 
significant. 

   The market's hugely oversold condition has caused speculators to build a 
massive short position. In fact, managed money traders have saturated the trade 
with a record net-short position. While such a leaning to one side is not to be 
taken as an automatic buy signal, one wonders how long will it be before 
attitudes and sentiments began to shift towards the other direction.  

   The market continues to watch the situation unfolding in India. Besides the 
fact India cut 2019 cotton acreage some ten percent, much of the agricultural 
production is being negatively affected by delayed and sporadic monsoonal 
activity. Already this year's monsoons have deviated under India's fifty-year 
average, placing the nation in a water crisis.  Other potential troubled spots 
are Pakistan (desert locusts), and China (infestation of Fall Army Worms). 

   For today, close-in support for December cotton stands at 61.65 cents, with 
resistance at 64.00 cents and 64.70 cents. The estimated overnight volume is 
3,300 contracts. 

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


(BE)

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