Keith Brown DTN Contributing Cotton Analyst    

The cotton market was materially lower Monday as recent reports and events have combined to exert negative pressure on prices. Last Friday, USDA reported a larger domestic crop, with increased domestic stocks, worsening world consumption and thus higher global stocks. In addition, the relaxation of China's COVID restrictions has led to widespread outbreaks. Supposedly, Chinese mills are running at 50% or less capacity.    

Tuesday, new CPI data will be issued. This report will help influence the Federal Reserve to increase interest rates; that announcement is due on Wednesday afternoon. It is understood that higher rates will strengthen the U.S. dollar, which, in turn, could hamper future export sales.    

Crude oil gained about $2 a barrel Monday on supply jitters. A key pipeline supplying the United States with Canadian oil was closed due to a leak. Thus far, this spill has resulted in more than 14,000 barrels lost on the ground. It is the largest domestic oil spill in 10 years. Next, Russia threatened a production cut, even as China is loosening COVID-19 restrictions, as a means of jumping fuel demand.    

For Monday, March 2023 finished at 79.39 cents, down 1.56 cents and July 2023 settled at 79.41 cents, 1.25 cents lower. Estimated volume was 27,128 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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