DTN Closing Cotton            02/09 13:31

   Cotton Adjusts Higher

   After enduring eight consecutive lower closings, the cotton market popped 
higher today.

Keith Brown
DTN Contributing Cotton Analyst

   After enduring eight consecutive lower closings, the cotton market popped 
higher today. In addition to its oversold condition, traders were also squaring 
their positions in preparation for Tuesday's supply-demand update.

   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 bales seen in 
January. Exports are expected at around 12.17 million bales, down from 
January's 12.20 million bales, resulting in ending stocks at 4.21 million 
bales, up from 4.20 million bales. World production is expected around 119.52 
million bales versus 119.43 million bales, and world ending stocks are expected 
at 74.56 million bales versus 74.48 million bales 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 70,000-80,000 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.

   The U.S. dollar was lower today. Among the factors weighing on the Greenback 
has been the talk of investors diversifying away from U.S. markets. Also, 
Chinese regulators have advised financial institutions to curb their U.S. 
treasury holdings, sending the onshore yuan to a 33-month high against the U.S. 
dollar.

   Traders are weighing their bets on policy easing from the Federal Reserve 
later this year. Markets are also bracing for a potential shift in U.S. 
monetary policy stance following the nomination of Kevin Warsh to succeed 
Jerome Powell as Fed chair.

   For the ICE market Monday, July was 65.45 cents, up 62 points; December 2026 
closed at 67.95 cents, plus 35 points; and March 2027 finished at 68.82 cents, 
20 points higher. Monday's estimated volume was 139,728 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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