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DTN Morning Cotton Commentary          05/25 08:19

   Cotton Trades Mixed

   The cotton market is a divided house Wednesday morning as spot July is 
materially higher, while new crop December is struggling lower. 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is a divided house Wednesday morning as spot July is 
materially higher, while new crop December is struggling lower. The strength 
seen in spot July relates to textile mill fixation buying. That is, with July's 
delivery period only 20 trading days out (June 24), those buyers have become 
active. On the other hand, improving rains across West Texas may be bringing a 
bit of relief to that parched crop. 

   Weather-wise, the current one to five-day forecast shows no rain for West 
Texas. However, the six to ten-day outlook suggests better rain chances, but 
with above-normal temperatures.

   Thursday at 8:30 a.m. EDT, USDA will issue its weekly export sales report. 
From a psychological view, China needs to be an obvious participant. Many 
traders remain concerned that the COVID-19 lockdown will adversely affect 
future cotton demand.

   Crude oil is higher Wednesday morning, buoyed by tight supplies and the 
prospect of rising demand from the summer driving season in the United States, 
the world's biggest crude consumer. Current gasoline inventories are tight, 
with Tuesday's API report indicating refined oil products fell by 4.2 million 
barrels last week.

   For Wednesday, support for the July contract stands at 140.50 cents and 
140.00 cents, with resistance at 144.50 cents and 145.10 cents. The estimated 
morning volume is 10,652 contracts.

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




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