Keith Brown DTN Contributing Cotton Analyst    

Comments Tuesday from Fed Chair Powell proved particularly bullish to the U.S. dollar, and therefore bearish to the cotton market. In summary, the central banker said that U.S. interest rates will continue to rise for some time. That verbiage put the idea of a general recession on a fast track. This Friday's jobs data will be key to whether the Federal Reserve hikes rates one-quarter or one-half point.    

Wednesday, USDA will issue its March supply-demand update. For that report, the average trade guess for domestic ending stocks is 4.26 million bales. The February number was 4.30 million bales. World ending stocks are expected at 89.07 million bales versus 89.08 million in February.    

March cotton will expire on Thursday's settlement. To date, there have been no deliveries.    

This Friday, the monthly jobs report will be out. Expectations call for 213,000 new jobs versus last month's 517,000 jobs. Unemployment is expected to be at 3.5%.    

Crude oil prices fell by more than $2.50 per barrel Tuesday, as comments from the U.S. Federal Reserve Chair Jerome Powell stoked rate hike fears. Energy prices declined after Powell told Congress the Fed would likely need to increase rates more than expected in light of recent strong economic data. His remarks pushed up the U.S. dollar some 1%. A stronger dollar typically reduces demand for dollar-denominated oil from buyers paying with other currencies. Further pressure on the energies came from a contraction in China's exports and imports in January and February, including crude oil imports, despite a lifting of COVID-19 restrictions.    

Tuesday, May 2023 finished at 82.77 cents, minus 1.94 cents, July settled at 83.58 cents, down 1.86 cents and December 2023, ended at 83.53 cents, 1.61 cents lower; estimated volume was 33,945 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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