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DTN Closing Cotton            12/06 13:40

   Cotton's Balloon Bursts

   The cotton market's early morning rise gave way to corroding outside 

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market's early morning rise gave way to corroding outside 
markets. The Dow Jones, energies and metals all traded sharply lower amid 
rising fears of inflation. Meanwhile the U.S. dollar traded higher. Many 
investors are thinking they are seeing the proverbial handwriting on the wall 
regarding higher interest rates and recession. Last week's strong jobs report 
and Monday's manufacturing data began to set the bearish pace. However, over 
the next few days, new PPI and CPI will be issued just in time for the Federal 
Reserve's meeting on December 13. 

   Spot December cotton remains in its delivery period. There were no notices 
issued Tuesday. To date there have been only five notices tendered against the 
spot contract. Delivery runs through December 7, the expiration date for the 

   This Thursday, USDA will issue its weekly export sales report. Of late, U.S. 
sales have been terrible, being a net negative 109,000 bales two weeks ago, and 
less than 30,000 bales sold for last week. Exports will be out at 8:30 a.m. EST.

   In addition, tabulators will update the latest supply-demand numbers on 
Friday with the report released at 12:00 p.m. EST. 

   The energy sector continued to rip lower Tuesday. In fact, global oil prices 
slid to their lowest since January. There are big concerns that a slowing world 
economy will offset any would-be bullish effects from an EU-led price cap on 
Russian oil sales.

   For Tuesday, December closed at 85.39 up 0.45 cent, March 23 finished at 
84.59, up 0.73 cent, and July 23 settled at 83.66, 1.07 cent higher. Tuesday's 
estimated volume was 24,131 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com

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