By Keith Brown, DTN Contributing Cotton Analyst
After a strong performance in the month of January, the cotton market is beginning to experience some adjustments within its pricing structure. Word is some managed-money funds are rolling out of March cotton into the deferred contracts. Their action has resulted in a lower spot March, but higher July and December futures. In fact, March cotton dropped nearly 1% Tuesday.
Traders are keenly awaiting USDA’s export-sales report this Thursday. The demand for U.S. cotton has been nothing short of robust, but actual shipments have been hampered by the on-going global shipping crisis.
Wednesday, the U.S. Department of Energy (DOE) will publish its weekly inventories report. Expectations call for a build of 1.525 million bales versus last week’s big increase of 2.377 million bales. Along those lines, there is some speculation that OPEC+ may elect to increase crude supplies given that prices have staged a strong upside run.
Tuesday, March cotton settled at 127.33 cents, down 0.24 cent, July ended at 120.57 cents, up 0.91 cent and December finished at 102.43 cents, 1.56 cents higher; estimated volume was 53,992 contracts.
Source: Agfax