DTN Closing Cotton: Cotton Sharply Up, Trend Changing?
DTN Closing Cotton: Cotton Sharply Up, Trend Changing?

DTN Closing Cotton: Cotton Sharply Up, Trend Changing?

A- A+

Keith Brown DTN Contributing Cotton Analyst    

The cotton market was demonstratively higher Tuesday as certain speculators short-covered their previously bearish positions, while "bull-struck" traders bought long. Technically, the market closed above the 100-day average, as well as pierced a down-sloping trendline, encompassing the January to March to April highs. Those technical events, among others, help to encourage many traders to reverse.    

Weather-wise, there is no rain in the forecast for West Texas for the next five days. Moreover, the six- to 10-day outlook indicates below-normal precipitation. However, there is a chance of above-normal precipitation now showing in the eight- to 14-day model.    

The U.S. dollar was lower Tuesday, after better-than-expected economic data was reported by China. Its gross domestic product (GDP) grew 4.5% year-on-year, beating forecasts calling for a 4% expansion. Within that data, China's retail sales were reported at 0.6%, beating expectations and hitting a near two-year high. The U.S. financial markets are indicating a 90% chance that the Federal Reserve will raise interest rates by 25 basis points at its May meeting.    

Tuesday, May 2023 finished at 84.55 cents, plus 1.25 cents, July settled at 84.83 cents, up 1.55 cents and December 2023 ended at 84.21 cents, 1.33 cents higher. Estimated volume was 47,054 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

(c) Copyright 2023 DTN, LLC. All rights reserved.

Source: qualitygin.com

Tags

newsletter

Subscribe to our daily newsletter