Keith Brown DTN Contributing Cotton Analyst
The cotton market traded positive and negative several times Wednesday before settling slightly lower on the day. Traders were anticipating the Fed's interest rate announcement, and thus the action was very muted.
The Federal Reserve delivered a widely-anticipated 50-basis-point rate hike at the conclusion of its December policy meeting. It was a smaller increase than the prior four consecutive rate hikes, but still interest rates are at 15-year highs. The central bank also said it would likely keep rates higher through 2023, with no reductions until 2024.
Thursday morning, USDA will issue its weekly export sales. Last week saw combined seasonal sales of 59,000 bales. China was the top buyer.
The energy complex was higher Wednesday as OPEC said it expects oil demand to grow by 2.25 million barrels per day (bpd) over next year to 101.8 million bpd. In addition, if China recovers from its COVID-19 situation, then the upside potential for energy demands increases all the more.
For Wednesday, March 2023 finished at 81.37 cents, down 0.26 cent and July 2023 settled at 81.37 cents, 0.20 cent lower; estimated volume was 22,922 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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