By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market saw increased selling as Monday’s trading bar looked bearish on the charts. Thus, after a long upside rally, newly minted bullish speculators elected to lighten some of their positions. Of course, the fact there are several key events at the end of this week might be causing some traders to square positions. Thursday will see weekly export sales, as well as a monthly supply and demand report, while Friday will bring option expiration for the July contract.

The Federal Reserve is holding its two-day meeting on monetary policy. Wednesday the Fed will announce any new moves or changes, but it is expected it will remain steady. Interest rates are edging ever closer to negative levels, but the Fed has somewhat promised it will do all it can to hold rates neutral to positive. The effect of falling rates has been negative to the U.S. dollar. From its sideways path across the months of April and May, the U.S. dollar Index has dropped from par (100) to 96.50 cents. Of course, a cheaper dollar makes U.S. commodities more accessible for exports.

July cotton ended at 60.52 cents, down 0.29 cent, December closed at 60.02 cents, down 0.35 cent and March cotton finished at 60.70 cents, down 0.24 cent. Estimated volume was 42,988 contracts.