By Keith Brown, DTN Contributing Cotton Analyst 

After languishing sideways for several sessions, the cotton market finally came alive and shot to the upside. In fact, at one time Wednesday, spot December came within 0.100 cent of touching limit up. However, some profit-taking did pare a portion of those gains into the close. The market’s rally was likely fueled by outside markets.

As of this writing, the Dow is poised to make all-time highs. In addition, inflation comments from a well-known hedge fund operator helped stoked bullish sentiment. That manager said inflation is “probably the single biggest threat to financial markets, and I think to society just in general.”

He elaborated that the trillions of dollars in fiscal and monetary stimulus will be the reason inflation will run hotter and longer than anyone can imagine. Lastly, an unexpected drawdown in energy stocks caused those markets to trade higher.

USDA will release its weekly exports-sales on Thursday. Traders are definitely on the lookout for improving business. Currently, we note that cumulative sales have reached 52% of the USDA’s forecast for the current marketing year versus a five-year average of 55%.

Additionally, on Friday the CFTC will issue new trading data. The last report indicated that the managed-money funds had pared some 10,000 contracts from their overall net-long position of 94,000-plus contracts. Friday’s data will be as of Tuesday’s close (Oct. 19). At that time, December cotton had closed at $1.0783, versus its $1.0638 settlement on the previous Tuesday, Oct. 12. That report is out at 4 p.m. ET.

For Wednesday, December settled at $1.1073 up 0.290 cent, March ended at $1.0863 plus 0.279 cent, and Red December (2022) ended at 90.50 cents, 0.038 cent lower. Wednesday’s estimated volume was 27,787 contracts.