By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market had a strong performance Monday, influenced by its trend, the weather and outside markets.

Despite last week’s dramatic fall in which spot May collapsed some 13% off its high, the market was right back gnawing away at upside levels. With the managed-money funds increasing their net long position, according to the latest CFTC data, they continue to buy in the direction of the upside trend.

In addition, other markets Monday elected to add another layer of war premium which encouraged cotton to trade high. Grains, metals and energies were higher, with crude oil jumping over 3% despite the release of strategic reserves by the Biden administration. In fact, many traders believe that the U.S. action will not assuage the fears that energy costs will increase over time.

The drought across West Texas and Oklahoma continues to worsen. The latest weather models from NOAA show long-range dryness as being nowhere near unresolved. Additionally, the Southeast is turning very dry as well.

The U.S. dollar was higher Monday. The breakdown in the Ukrainian/Russia peace talks buoyed the greenback. Also, traders are expecting an eventual half-percent rate hike from the Fed in its May meeting.

Monday, May cotton settled at 137.94 cents, up 3.39 cents, July closed at 134.28 cents, up 3.35 cents and December finished at 113.76 cents, 3.08 cents higher; estimated volume was 29,627 contracts.