Keith Brown DTN Contributing Cotton Analyst
The cotton market blew a 2-cent lead early in the New Year's first session to finish moderately lower Tuesday. A stronger U.S. dollar, weak surrounding markets and rising COVID cases in China were the top negatives.
Adding to cotton's negative environment are those cotton growers who are selling last year's production in the new tax year. For the next few weeks, many producers will need to square up with bankers and lenders, somewhat forcing them to sell. That is just another layer of negativity the market must endure.
The next weekly export-sales report will be released this Friday. Last week saw positive sales of 82,254 bales, but the prior week, sales were a net negative 87,500. Thus, net sales for the past two weeks for the current crop year remain fractionally negative.
Crude oil prices fell some 3.5% Tuesday in a volatile trade. The related pressure came by means of weak demand data from China, a gloomy economic outlook and again, a strong U.S. dollar. In other Chinese news, its factory activity shrank in December. Surging COVID infections affected workers, disrupted production and weighed on demand after Beijing's removal of certain antivirus protocols.
Tuesday, March 2023 finished at 83.14 cents, down 0.23 cent, July settled at 82.98 cents, off 0.40 cent and December 2023 ended at 80.88 cents, unchanged; estimated volume was 26,797 contracts
Keith Brown can be reached at commodityconsults@gmail.com
(c) Copyright 2023 DTN, LLC. All rights reserved.