By Keith Brown, DTN Contributing Cotton Analyst 

Despite starting the day with a sharp decline, the cotton market was able to regroup and resume its uptrend. Several analysts had indicated the market is extremely overbought and were calling for a retreat of some measure. However, the surrounding uptrend for “all things commodities” continues to undergird the market. To that end, trend-following speculators, who tote a hefty net long position, continue to support the market on any declines.

Still, the market is in need of continuous friendly news and therefore traders anxiously await Thursday’s weekly export-sales. Last week’s business was off-average, but that was also the time China was celebrating its spring festival. With its return, traders are hoping Thursday’s number may be very positive to the trend.

Fed chairman Jerome Powell testified before the Senate banking committee Tuesday, telling them that strong demand is driving Treasury bill yields close to zero. He further indicated the Fed is greatly concerned about keeping its target fed funds rate in its targeted range of zero to 0.25%. With those comments the Dow eased lower, while the U.S. dollar traded slightly higher. The chairman will speak to the House finance committee Wednesday.

For Tuesday, May cotton settled at 92.67 cents, up 0.26 cent, July settled at 93.33 cents, up 0.25 cent and December cotton ended at 86.75 cents, up 0.16 cent; estimated volume was 30,485 contracts.