DTN Closing Cotton: Cotton Higher Tuesday
DTN Closing Cotton: Cotton Higher Tuesday

DTN Closing Cotton: Cotton Higher Tuesday

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Keith Brown DTN Contributing Cotton Analyst    

In a somewhat classic counter-Monday trade, the cotton market did close higher Tuesday. Primarily, aiding and abetting that move was the Dow Jones, which, after posting a new low for the year, rebounded in its attempt to break a three-day losing streak.    

This Thursday, USDA will issue its May Crop report. Within its data, tabulators will take a crack at 2022 production for a crop that is not fully planted. Also on Thursday, the weekly export-sales report will be released. Last week, its numbers were very much supportive to the market, although China was in the throes of shuttering much of her economy.    

Oil prices tumbled more than 1% Tuesday, on Chinese COVID-19 lockdowns, as well as recession fears. The decline in crude oil reflected trends in global financial markets as investors shed riskier assets on worries about higher interest rates and their impact on economic growth. The U.S. dollar was able to hold near to its 20-year high, made just this week.    

Weather-wise, the one- to five-day outlook does allow for some rain into West Texas. However, the Six- to 10-day and eight- to 14-day forecasts are showing normal chances for rain and increasing temperatures. The U.S. Drought Monitor continues to underscore the extreme and exceptional drought conditions for West Texas. However, the Southeast is quickly becoming another production area of concern. Rains have been very spotty for southern states for several weeks, and no rain is seen in the 10-day forecast. Such conditions are reflective of the La Nina phenomenon that is gripping parts of North America.    

For Tuesday, July cotton settled at 142.94 cents, up 0.01, December closed at 124.17 cents, up 0.54 cent and March 2023 finished at 118.91 cents, 0.40 cent higher; estimated volume was 19,210 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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Source: qualitygin.com

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