By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market traded both sides of Friday’s close Monday, looking for some technical or fundamental direction. Traders saw the U.S. dollar gain strength ahead of the Federal Reserve’s statement on Inflation this week.

At risk is the question of whether the current 30-year inflation pace is transitory (temporary) or not. Biden administration officials say it is the result of the supply-chain crisis and will subside into 2022. However, the fear among traders is the Fed may be forced to raise rates ahead of its 2022 schedule.

Monday afternoon at 4 p.m. EST, USDA will update the progress of the 2021 harvest. Last week’s activity was pegged at 55% complete versus a 5-year average of 57%.

Cumulative sales for 2021/22 have reached 8.64 million bales, which is down from the 9.10 million of a year ago. The five-year average is 8.52 million bales. Percentage-wise, sales have reached 59.0% of USDA’s forecast for the marketing year versus a five-year average of 59.6%.

China continues to be the largest buyer of U.S. cotton. In fact, China has the most commitments for 2021/22 at 2.67 million bales, followed by Turkey at 1.22 million and Pakistan at 1.178 million. China is hoping to get the U.S. to reduce buying by some 35% to $265 billion. Of course, China’s ultimate goal is to have all U.S. levies removed. Monday, Biden and Xi will talk on these topics as well as others, namely Taiwan.

Monday, December settled at 117.62 down .70 cent, March ended at 114.64 minus .44 cent, and December 2022 ended at 92.10, .45 cent higher. Monday’s estimated volume was 32,691 contracts.