DTN Closing Cotton            10/14 13:31

   Cotton Stumbles On Data

   Cotton futures rise as inflation data boosts rate hike concerns (10 words)




Keith Brown
DTN Contributing Cotton Analyst

   The cotton market seesawed during its Wednesday session after bearish 
inflation numbers crippled many outside markets. Traders will now await 
Thursday's second installment of the critical inflation situation, as well as 
exports-sales and the CFTC update on Friday. 
The Consumer Price Index increased 3.7% year/over/year in September. The number 
was way on the high side of the consensus estimate of 3.6%. Core inflation, 
excluding food and energy prices, came in at 2.6% on an annualized basis, 
versus 2.5% consensus estimate.
The U.S. Dollar Index was materially higher Wednesday (up 0.40%) amid today's 
CPI data. Now, the odds for an Oct. 28 quarter-point hike in the fed funds rate 
jumped 44% from just 22% a day ago, according to the CME's FedWatch tool. 
Moreover, there is now a greater than 95% chance of at least one hike before 
2026 is over, plus a 40% chance that rates are half-percentage point higher. 
On Thursday, fresh PPI (wholesale inflation) numbers will be released. Its 
numbers are now expected to be elevated. Headline monthly PPI is estimated at 
0.5% versus the previous 0.4%.
Weekly exports-sales will be released this Friday. Highlights from last week's 
report included net combined seasonal sales of 221,128 bales. That amount was 
below the previous 241,727 bales, but was higher than the four-week average. 
Cumulative sales for 2027/28 have reached 44% of the USDA forecast versus a 
five-year average of 53% for this point in the marketing year. Shipments 
totaled 161,588 bales, up from 149,507 the previous week.
Also on Friday at 3:30 p.m. EDT, the CFTC will update its C-O-T numbers. Last 
week, the managed-money funds net sold some 10,000 positions reducing their 
net-long carry to 63,837 contracts. 
December futures closed Wednesday at 8066, up 15 points, March 2027 finished at 
8400, plus 17 points, and July 2027 settled at 8613, 21 points higher. 
Wednesday's estimated volume was 54,476 contracts.

   Keith Brown can be reached at [email protected]




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