Keith Brown DTN Contributing Cotton Analyst
The cotton market was higher Thursday as trend-following traders elected to add to their positions. However, after its 37-cent rally off the July 15 lows (a 45% gain), traders are concerned that higher prices could stifle cotton's demand. With that, Thursday's export sales were not reported by USDA due to a "technical goof."
Heavy rains are falling across the U.S. Delta, threatening its cotton crop. As of Monday, such states as Mississippi and Louisiana, were at least 35% with open bolls. Moreover, the weekly crop progress report indicated the entire U.S. crop has the lowest good-to-excellent readings on record. Thursday afternoon, NOAA will update its Drought Monitor.
Many markets and traders are awaiting comments from Fed Chairman Jerome Powell Friday. His speech will close out the Federal Reserve's three-day economic symposium at Jackson Hole, Wyoming. He is expected to keep upward pressure on interest rates as the main tool to fight inflation.
Thursday afternoon, the CFTC will present its weekly commitment of traders report. Last week's data showed that managed-money funds had bought some 11,000 contracts, increasing their net long position to 40,000-plus. For context, earlier in the season they were 90,000 contracts net long.
For Thursday, December closed at 114.11 cents, up 0.04 cent, March 2023 finished at 110.83 cents, down 0.18 and July 2023 settled at 103.11 cents, 0.41 cent lower; estimated volume was 19,117 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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