Keith Brown DTN Contributing Cotton Analyst    

The cotton market was markedly lower Wednesday as traders want to see Thursday's CPI (inflation) and USDA's supply-demand report.    

Thursday's CPI could show inflation running at a hotter pace than last month. Some analysts are suggesting CPI increased at a 0.1% monthly pace, while core, excluding volatile food and energy prices, is indicating a 0.5% gain. Both estimates are greater than consensus estimates calling for a decrease of 0.1% on headline and gain of 0.3% on core. Of course, a high CPI would likely compel the Federal Reserve to continue hiking interest rates, thus strengthening the U.S. dollar.    

For Thursday's WASDE, traders see domestic production coming in near 14.14 million bales, compared with 14.24 million bales reported in December. Traders then expect exports to be near 12.12 million bales versus the 12.25 million in December. However, domestic ending stocks are expected at 3.5 million bales, identical to the 3.5 million published in December. In the world, global consumption is anticipated at 111.57 million bales, compared to the 111.70 million last month. World ending stocks are looking to be at 89.46 million bales. They were 89.56 million in December.    

Also on Thursday, USDA will release its weekly export-sales. Last week's current season sales only amounted to 39,000 bales, with shipments under the 100-000 bales mark. China was a noted canceller.    

Wednesday, March 2023 finished at 84.26 cents, down 0.50 cent, July settled at 84.36 cents, down 0.40 cent and December 2023 ended at 81.58 cents, 0.45 cent lower; estimated volume was 33,320 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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