Keith Brown DTN Contributing Cotton Analyst    

The cotton market closed out the month, the quarter, and the year with a moderately higher. To some degree the market took its positive cue from a weaker U.S. dollar, stronger Chicago grains, and a neutral export-sales report. There was also a lot of adjusting and rebalancing by traders.    

The weekly export-sales show a combined positive number of 85,000 bales sold, which somewhat tampered down last week's business of a minus 87,000 sold. The cause for that latter number was China's cancellation of 144,000 bales.    

Friday, the CFTC will update its commitment of traders data. The managed-money funds have essentially been bullish for the entirety of 2022, but recently they may have been liquidating some long positions. However, with corn and soybeans inordinately high, the inexpensive stance of cotton could make it a favorable buy during 2023.    

Crude oil closed higher today amid a weaker U.S. dollar and hopes China will soon emerge from her fight with COVID. It is estimated some 25,000 Chinese are dying daily as a result of COVID-19. Other traders are thinking the Federal Reserve will dampen their interest rate hikes in 2023.    The cotton market will be closed Monday in observance of New Year.    

For the week, March cotton was down 1.79 cents, for the month, it was off 1.23 cents, and annually, the market was down 29.00 cents.

Friday's final trades were March 2023 finished at 82.64 cents, up 0.71 cents, July settled at 83.37 cents, up 0.74 cents, and December 2023 ended at 80.81 cents, 0.57 cent higher; estimated volume was 16,591 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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