Keith Brown DTN Contributing Cotton Analyst
The cotton market was moderately lower Wednesday, amid its poor technical action, as well as the notion that the U.S. crop is improving. Traders are also awaiting Thursday's exports-sales.
Certain analysts are saying that initial weather conditions have been "ideal" for the 2023 planting season. No doubt the fields of West Texas have vastly improved over last year, plus rain is falling across the Delta and the Southeast. Thus, despite the fact there are fewer acres destined for the 2023 season versus last year, production is apt to be much larger because of less abandonment.
The Federal Reserve did halt its expansion of interest rates for now. However, in the statement, the central bank indicated that two more rate hikes would be forthcoming this year. The Dow fell nearly 400 points.
On Thursday morning, USDA will issue its latest export-sales data. Last week saw a massive, marketing-year high amount of nearly 500,000 bales. China was the top buyer with some 225,000 bales.
The U.S. Drought Monitor will be updated Thursday morning. Since early April, the drought conditions across the cotton belt have dramatically improved, moving from 46% of the cotton area in drought conditions, down to 19% by June 6. For next week, West Texas appears to be facing extremely high temperatures, with little to no rain.
July cotton will enter its delivery on June 26. The contract will expire on July 7.
Wednesday, July settled at 81.79 cents, down 0.93 cent and December 2023 ended at 80.11 cents, 0.91 cent lower. Estimated volume was 34,689 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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