DTN Morning Cotton Commentary          10/27 07:31

   Cotton Up on US-China Trade Framework

   The cotton market is moderately higher Monday.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market is moderately higher as news that the U.S. and China have 
come to tentative and acceptable trade terms was announced. Over the weekend, 
U.S. and Chinese negotiators met in Malaysia to hammer out a beneficial 
framework relating to tariffs, rare earths, and agricultural commodities. 
Presidents Trump and Xi are expected to meet later this week to finalize the 
deal.

   The U.S. dollar is slightly lower Monday, as it is coming off a 6-day rally 
against the Yen and a 3-day losing streak versus the euro. Investors are 
bracing for a week packed with central bank meetings and trade negotiations. To 
the former point, the Federal Reserve is meeting this week, with its interest 
rate decision to be announced Wednesday.

   The U.S. government shutdown remains on-going, although there is mounting 
pressure for the Democratic holdouts to cave. Supposedly this weekend, the 
first of November, will see many of the government's social assistance programs 
come to a halt.

   Crude oil is lower Monday, amid the belief that global demand will remain 
subdued. Treasury Secretary Scott Bessent said on Sunday the U.S. and China had 
hashed out a "substantial framework" for a trade deal that could avoid 100% 
U.S. tariffs on Chinese goods and achieve a deferral of China's rare-earth 
export controls in trade discussions this week. The announcement has boosted 
global stock markets as well as certain agricultural commodities but has had a 
negative effect on such safe-haven markets as gold and bonds.

   Daily chart support for December cotton stands at 64.10 cents and 63.80 
cents, with resistance at 65.50 cents and 66.00 cents. Monday morning's 
estimated volume is 22,488 contracts.

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




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