By Keith Brown, DTN Contributing Cotton Analyst 

The U.S. Dollar Index kept the upside pressure going Wednesday, which resulted in the cotton market easing lower. The driving forces for the dollar’s strength is its oversold condition and the on-again, off-again stimulus message from Congress. No new stimulus legislation is considered friendly to the dollar.

Technically, the cotton market has become slightly overbought as speculators have been net long for some time. However, Tuesday, spot December missed a golden opportunity to force a new high for the five-month up move, but it failed. That failure brought out sellers of every stripe.

Thursday, USDA will issue its weekly export sales data. Last week, sales were 153,277 bales while shipments were 277,500 bales. Of late, China and Vietnam have been the dominant buyers of U.S. cotton. The cotton market needs to see a strong number for obvious technical and psychological reasons.

The next big event for the cotton market will be Friday’s jobs reports. Estimates are for 1.2 million new jobs.

The six- to 10-day weather forecast has central Texas, across the Delta and into the Southeast with above-normal rainfall. However, extreme West Texas looks to be below normal rainfall. Temperatures look to be below normal for all of Texas and across the Delta, but Georgia and up the Atlantic coast are scheduled to experience above normal temperatures.

For Wednesday, December cotton closed at 64.96 cents, down 0.44 cent, March ended at 65.88 cents, down 0.43 cent and December 2021 finished at 65.69 cents, down 0.21 cent. Estimated volume was 24,756 contracts.