DTN Morning Cotton Commentary          01/27 07:13

   Cotton Market Trying to Rebound After New Contract Lows

   After its triple-digit plunge of Monday to new contract lows, on massive 
volume, the cotton market is trying to regain some "feeling" today.

Keith Brown
DTN Contributing Cotton Analyst

   After its triple-digit plunge of Monday to new contract lows, on massive 
volume, the cotton market is trying to regain some "feeling" today. Most 
analysts offered few explanations as to "the why" of the big spill, but some 
are thinking the record open interest, and the potential government shutdown 
are both involved.  

   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 DHS budget. 
However, most funding for Homeland Security, some $29 billion, has already been 
approved. 

   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". 

   This Thursday at 8:30 a.m. EST, USDA will issue its weekly exports-sales 
report. The previous two releases both showed marketing-year-year high sales 
amounts. Cumulative sales have reached 66% of the USDA forecast versus a 
five-year average of 80% for this point in the marketing year.

   Also on Thursday, Q4 GDP, Factory Orders, and Durable Goods will be 
released. Expectations call for improvements in all numbers.  

   Chart support for March Cotton stands at 6250 and 6200, with resistance 
hovering about 6400 and 6450. This morning's estimated volume is 13,305 
contracts.

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




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