Keith Brown DTN Contributing Cotton Analyst
The cotton market was lower Thursday as USDA's weekly export sales data reported total sales of 33,000 for this year, and 13,000 for new crop. In addition, the U.S. dollar ran to new highs, buoyed by the hawkish attitude of the Federal Reserve. Wednesday, the central bank hiked rates 75 basis points, which was expected, but its post-meeting comments were bearish.
There is potential for a hurricane to emerge in the Gulf of Mexico next week. Currently labeled as Invest-98, the storm is soon expected to attain hurricane status. Right now, its development and track is anyone's guess, but the Southeastern cotton crop would be vulnerable to major losses, provided the storm is strong and makes landfall at the right area.
China has built a massive COVID-19 isolation center made up of hundreds of temporary buildings. Drone footage from TikTok reveals massive numbers of prefab structures similar to shipping containers. It's part of a broad plan to provide 100,000 isolation beds across three sites. The size of the facilities encompasses roughly 240 American football fields.
Friday, CFTC will update the status of the managed-money funds. Last week saw their net long position drop to 48,000 contracts. At their peak, those speculators carried a stack of 90,000-plus net long contracts.
Some interesting climate notes show that Russia and Ukraine weather will continue to improve for planting, good for emerging and establishing winter crops, while China's Yangtze River Basin will continue to see very little rainfall for the next two weeks. Central and eastern India will receive widespread rain over the next ten days, but Pakistan will remain dry. Eastern Australia is expected to stay wet into early next week with Western Australia seeing scanty rainfall.
For Thursday, December closed at 96.54 cents, down 0.38 cent; March 23 finished at 93.56 cents, down 0.50 cent, and July 23 settled at 88.69 cents, 0.40 cent lower. Thursday's estimated volume was 24,323 contracts.
Keith Brown can be reached at commodityconsults@gmail.com
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