DTN Morning Cotton Commentary          01/26 07:25

   Winter Storm Causes Cotton Trade Slowdown

   Last night, certain major trading platforms were off-line due to the 
inclement weather conditions. In times of uncertainty, markets tend to fall, 
and cotton is no exception. Thus, the March market is not that far from posting 
new lows.

Keith Brown
DTN Contributing Cotton Analyst

   To some degree, Winter Storm Fern, with the accompanying arctic blast, is 
causing (except the precious metals) a slowdown in some trading activities. 
Last night, certain major trading platforms were off-line due to the inclement 
weather conditions. In times of uncertainty, markets tend to fall, and cotton 
is no exception. Thus, the March market is not that far from posting new lows. 

   The CFTC issued its updated Commitment-of-Traders Report last Friday. It 
showed the managed-money funds net sold some 1,500 positions per last Tuesday's 
settlement, increasing their net-short carry to 51,952 contracts. 

   Crude oil is edging higher today, as output disruptions in major US 
producing regions and tensions between the U.S. and Iran boosted prices. 
Traders estimate some 250,000 barrels per day of crude production has been lost 
due to harsh weather in the Bakken fields of Oklahoma and parts of Texas. 
Traders are also wary of the U.S. "armada" that is heading towards Iran. 

   March options will expire on Feb. 6, or in about two weeks. Traders will be 
anticipating what amount of Puts and Call may expire "in-the-money". 

   The U.S. government may be heading for another partial shutdown on Jan. 30. 
The death of another Minnesota protester by federal agents this weekend is 
unifying the Democrats in Congress to halt the funding of the Department of 
Homeland Security budget.  

   Chart support for March cotton stands at 6275 and 6210, with resistance 
hovering about 6410 and 6445. This morning's estimated volume is 24,380 
contracts.

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




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