The cotton market was materially higher Monday morning as a strong Dow, a wobbly U.S. dollar, and a net-short speculative position encouraged traders to buy long. To the latter, we believe this is the first net-short position held by the managed-money funds since 2021, at least according to our most recent records. Also possibly helping cotton surge was talk from China that has reached Peak-COVID. Chinese officials now believe that infections and deaths will soon be trending down.    

From last Friday's weekly export-sales report, we note that cumulative sales for 2022-23 have reached 9.068 million bales, which is off from last year's 11.27 million. It is also the lowest sales totals for this time of year since the 2016-17 season. In percentages, sales have reached 75% of the USDA forecast versus a five-year average of 80%.    

China is celebrating its Lunar New Year this week. Typically, much of the country will either slow or shut down economically. Millions of citizens will travel to their ancestral homes for reunions with family and friends, some not seen since pre-pandemic days. The holiday ends with the Lantern Festival on Feb. 5.    

Monday, March 2023 finished at 87.39 cents, up 0.69 cent, July settled at 88.06 cents, up 0.84 cent and December 2023 ended at 85.52 cents, 0.85 cent higher; estimated volume was 50,073 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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