Keith Brown DTN Contributing Cotton Analyst
The cotton market finished sharply higher Friday. Against the backdrop of strong exports-sales reports, and with the 2022-23 winding down, some textile mills and merchants are feeling the pressure to fix their outstanding short-bought contracts. Moreover, the heavily net short managed-money funds are covering as well. Thus, July cotton was up 3-plus cents for this week.
The U.S. Drought Monitor continues to show a worsening filed situation for West Texas. Some areas of the Southwest have severe drought readings. The immediate one- to five-day forecast has taken the rain out for a large swath of West Texas. However, the six- to 10- and eight- to 14-day outlooks still carry above-normal chances for rain.
Friday afternoon, the CFTC will update its Commitment of Traders data. Last week's report saw the managed-money funds nearly double their net short position to 20,000-plus contracts.
There were zero deliveries on the May futures. It expires this Monday, May 8.
The Labor Department released its monthly jobs report Friday morning. Current estimates were calling for 180,000 new jobs, but the number was 254,000 non-farms. That number may be considered inflationary.
Next week, the government will release new CPI and PPI data. If those reports underpin the "inflationary story," then some traders may expect even higher interest rates from the Federal Reserve.
For the week, July cotton was up 3.26 cents.
Friday, July settled at 83.90 cents, up 2.14 cents and December 2023 ended at 83.24 cents, 1.84 cents higher. Estimated volume was 51,340 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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