By Keith Brown, DTN Cotton Correspondent 

The cotton market ended moderately higher Wednesday based on USDA’s supply-demand report, and some weather issues.

Essentially, for the old crop (2020-21), tabulators slightly lowered production, increased exports, resulting in a lower domestic carryout of 3.3 million bales. For the new crop (2021-22), USDA projects an increased crop of 17.00 million bales, but lower exports (14.25mb), causing a small carryout of 3.10 million.

World carryout was also lowered. Thus, even with a projected increase of 22.5 million bales, total supply is projected to be the smallest in five years.

Thursday, USDA will issue its latest weekly export sales. Sales may be lackluster as there simply is not that much cotton left to sell. Thus, traders will focus on shipments.

Weather-wise increased rain chances for West Texas weighed on the market, while the Delta is becoming quite soggy. One contacted producer indicated he needs at least 10 days of dry weather or a large portion of the Delta crop will miss its optimum planting date.

The U.S. dollar rallied Wednesday despite the bearish CPI number. That report indicated an inflation rate of 4.2%, the highest since 2008. Yet traders, thinking the rate might cause the Federal Reserve to hike interest rates ahead of their preordained schedule, bought the U.S. Dollar Index.

Wednesday, July cotton closed at 88.23 cents, up 0.48 cent, December settled at 85.67 cents, up 0.14 cent and March 2022 ended at 85.25 cents, 0.13 cent higher; estimated volume was 29,354 contracts.