Keith Brown DTN Contributing Cotton Analyst    

The cotton market finished limit down Thursday yet again. Funds rapidly liquidated and panicky growers sold. Traders fear that rising interest rates will squelch demand for cotton apparel and products. In addition, Thursday's export numbers were bearish, and points to the possibility that China's interest seems to be waning.    

Earlier this week, China announced it was reducing its import forecast for the season by some 8 million bales due to COVID-19 lockdowns. USDA report had Chinese 2021-22 imports at 8.20 million bales, and 2022-23 at 10.00 million. Chinese 2021-22 consumption was forecast by USDA at 37 million bales and 2022-23 at 37.5 million    

The U.S. Dollar Index posted a new high Thursday. In fact, the greenback nailed a new 24-year high against the yen and is nearing parity to the Euro. Investors are betting on the Federal Reserve aggressively ratcheting up interest rates to deter inflation. Thus far, the Dollar is up more than 13% this year.    

September Crude fell under $90a barrel Thursday. Oil prices have tumbled over the past two weeks on recession concerns, despite a drop in crude and refined products exports from Russia amid Western sanctions and supply disruption in Libya.    

Friday afternoon, the CFTC will issue its commitment of traders data. Traders want to see how much damage has been done to the once-massive long side position held by the managed-money funds. It could be that they are slightly net short.   

For Thursday, December closed at 83.71 cents, down 4.00 cents, March 2023 finished at 79.83 cents, down 4.00 cents and July 2023 settled at 75.78 cents, down 4.00 cents; estimated volume was 41,670 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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