DTN Closing Cotton: Cotton Hits Limit-up, Then Wobbles
DTN Closing Cotton: Cotton Hits Limit-up, Then Wobbles

DTN Closing Cotton: Cotton Hits Limit-up, Then Wobbles

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Keith Brown DTN Contributing Cotton Analyst    

The cotton market traded limit-up in Tuesday's session, but then sold down to the daily lows. Obviously, at such price heights, the air becomes a bit rarefied. Tuesday's volume was super-heavy at 75,000 contracts-plus. One has to look back to February 2021 to find a day with higher volume.    

USDA's supply-demand update of last Friday, reduced the 2022 crop by nearly 3 million bales, resulting in speculators, hedgers and mills scrambling to buy. In fact, cotton production is at its lowest level since the 2009-10 marketing year. However, China's economy is in retraction so there is doubt about future demand.     

Crude oil was sharply lower Tuesday, as traders fear a widening of the global recession. Additionally, the EU is trying to broker a deal between the U.S. and Iran. If an agreement can be reached, then an additional million barrels a day could be added to the world's production numbers.    

The U.S. dollar was higher Tuesday, as there are expectations that the U.S. economy will be stronger than Europe, and that the Federal Reserve will continue to hike interest rates. Europe is struggling with an energy crisis after imposing sanctions on Russia due to its invasion of Ukraine. Russian state gas company Gazprom said that European gas prices could spike by 60% this winter.    

For Tuesday, December closed at 116.85 cents, up 3.26 cents, March 2023 finished at 113.35 cents, up 2.71 cents and July 2023 settled at 106.20 cents, up 0.05 cent; estimated volume was 82,272 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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Πηγή: qualitygin.com



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