DTN Closing Cotton: Cotton Sharply Up, Oversold
DTN Closing Cotton: Cotton Sharply Up, Oversold

DTN Closing Cotton: Cotton Sharply Up, Oversold

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Keith Brown DTN Contributing Cotton Analyst    

The market was sharply higher Tuesday, even missing limit-up by 0.04 cent, just one day after it was locked limit down. Cotton is extremely oversold and the lack of follow-through selling after Monday's limit-down settlement has sold-short traders covering and bargain-hunting bulls actively buying. In addition, the U.S. dollar is lower Tuesday amid comments from analysts suggesting the Federal Reserve may slow or halt their interest rates program after its November increase. Thus far, the dollar has shed about 1% to a three-week low.    

From a Chinese website, we understand that its internal procurement agency says it will buy some 6,000 tones for the state reserves.    

On Thursday, USDA will issue its weekly export sales. Last week's sales were 84.500, with China the number three buyer. Exports were 166,000 with China first in line with 71,000.    

By most technical measurements, the cotton market is technically "oversold". Therefore, some traders see any upswing as a "bear market rally" and may be willing sellers. However, with harvest soon approaching the 50%-mark, other traders may be less inclined to sell the market "down-in-the-hole".    

For Tuesday, December closed at 78.47 cents, up 2.34 cents, March 2023 finished at 77.94 cents, up 2.20 cents and July 2023 settled at 76.05 cents, 1.40 cents higher; estimated volume was 35,542 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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Πηγή: qualitygin.com

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