Keith Brown DTN Contributing Cotton Analyst    

The cotton market was sharply higher Monday but essentially for old crop reasons. That is, textile mills still carry substantial fixation obligations, which require them to buy the futures. Thus, with spot May expiring this Friday, the pressure is on to cover their hedges. In addition, speculators may also be pushing the bullish envelope as well. Accordingly, December cotton was higher, mainly due to it keeping pace with the spread differences.    

Monday afternoon USDA will issue its latest crop progress data. Last week the planting pace of the 2022 crop was pretty much even with the five-year average.    

The Federal Reserve's meeting this week is causing all sorts of high anxiety for the financial and commodities markets. A steady climb in interest rates ought to keep the U.S. dollar strong, and a strong dollar is like kryptonite to many export markets.    

Oil prices reversed course Monday to trade positively on fears that supply might be hampered by a potential European Union ban on Russian crude. The EU is leaning toward banning Russian oil imports by the end of the year.  Around half of Russia's 4.7 million barrels per day of crude exports go to the EU. Earlier in the day, crude oil was down $2-plus dollars.    

Monday, May cotton settled at 157.16 cents, up 4.83 cents, July closed at 150.81 cents, up 5.18 cents and December finished at 126.19 cents, 4.12 cents lower; estimated volume was 23,442 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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