Keith Brown DTN Contributing Cotton Analyst    

The cotton market was lower Wednesday amid fallout from other markets, all driven down by a surging U.S. dollar. Based on comments this week from Biden, Yellen and Fed Chair Jerome Powell, it seems that even higher interest rates are a lock. Of course, higher rates invariably translate into a strong dollar, which is an anathema to agricultural exports. The Federal Reserve plans on hiking its funds fund rates in June and July.    

Weather-wise, the one- to five-day forecast calls for strong rains across the Texas panhandle and into Oklahoma. However, the six- to 20-day outlook still indicates below-normal rainfall and above-normal temperatures.    

Crude oil prices were higher Wednesday after European Union leaders agreed to a partial and phased-in ban on Russian oil. EU leaders agreed in principle on Monday to cut 90% of oil imports from Russia by the end of this year. Once fully adopted, sanctions on crude will be phased in over six months and on refined products over eight months. In addition, China's reopening of Shanghai was seen as energy positive.    

For Wednesday, July cotton settled at 136.06 cents, down 2.92 cents, December closed at 118.43 cents, down 4.02 cents and March 2023 finished at 114.30 cents, 3.87 cents lower; estimated volume was 45,749 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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