Keith Brown DTN Contributing Cotton Analyst    

Thursday's cotton trade was somewhat two-sided as spot July was sharply lower, while December was slightly off. July was driven lower by a poor export sales report this morning, as well as some traders making early preparations for July's delivery period commencing on June 24. December was able to essentially trade unchanged as the weather forecast for West Texas remains hot and dry over the near term.    

Crude oil was higher Thursday on signs of tight supply, as the European Union works towards the total ban of imports from Russia. Additionally, a bigger-than-expected drawdown in U.S. crude inventories today encouraged buyers to wade in the market.    

Traders continue to express collective concerns with China's demand outlook. Many believe because of China's zero-tolerance for COVID-19, which brought about self-imposed lockdowns, global demand could diminish given consumers are paying up for energy and food needs.    

Weatherwise, the short-term outlook still shows almost no rain for West Texas. The 6- to 10-day model does call for above-normal precipitation, but with hotter temperatures. The 8- to 14-day forecast also indicates increased chances for precipitation for West Texas.    

For Thursday, July cotton settled at 140.61 cents, down 4.55 cents, December closed at 124.33 cents, minus .28 cent, and March 2023 finished at 119.54 cents, .41 cent higher. Thursday's estimated volume was 39,454 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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