Keith Brown DTN Contributing Cotton Analyst    

The cotton market managed to stay aloft Tuesday, supported by a higher Dow Jones. At one time, the Dow was up over 400 points, but a bank sector downgrade by Moody's Rating Service bent the equity market lower, and thus undermined cotton's strength. Nonetheless, cotton stayed within the confines of its sideways trade.    

Traders are waiting on this week's export sales from USDA for price direction. Last Thursday, there were large cancelations by Pakistan. It has been the second largest buyer of U.S. cotton for the current season, but currently has currency troubles.    

Wednesday, the Labor Department will issue its PPI data. This report records inflation at the wholesale level. Traders are expecting the year-over-year pace of 5.4%, while the month-over-month is expected 0.3% increase.    

The U.S. dollar edged higher Tuesday as traders pondered the difference between Tuesday's fairly strong CPI versus whether the Federal Reserve will hike interest rates next week. Some traders believe the central bank will put any potential rate hikes on hold due to the collapse of two banks this week.    

Tuesday, May 2023 finished at 81.37 cents, plus 0.19 cent, July settled at 81.93 cents, up 0.28 cent and December 2023, ended at 82.66 cents, 0.40 cent higher; estimated volume was 37,257 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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