Keith Brown DTN Contributing Cotton Analyst    

The cotton market was sharply higher Friday as the January jobs data indicated that the Fed's fight against inflation may be working. The result was a higher Dow Jones and a lower U.S. dollar. In addition, other outside commodities markets also participated in the rally. Interestingly, cotton did slough off a poor export-sales report in which China was seen as a net canceller.    

The CFTC will release its commitment of traders report Friday afternoon at 3:30. Last week's count had the managed-money funds net long 15,981 contracts.    

The U.S. dollar was lower Friday in the face of strong gains in the U.S. jobs data for December. The report showed employers added 223,000 jobs in the month. Economists had expected 200,000 jobs would be added. Wages grew by 0.3% last month, below forecasts of 0.4%. The data may reduce the odds that the Federal Reserve will hike interest rates by another 50 basis points next month.

Allegedly, the COVID situation in China has worsened. It is being reported that hospitals have absolutely run out of rooms and are having to place patients on cots up and down the corridors. Also, funeral homes and crematoriums are overwhelmed.     

Next week, USDA will issue its monthly supply-demand report better known as the WASDE. The release will be on Thursday. Also there will be quarterly grains stocks as well.    

Given this is the first week of trading for 2023, the advances in our tracked categories will be the same. Thus, March cotton was up 3.21 cents weekly, monthly and yearly.    

Friday, March 2023 finished at 85.68 cents, up 3.10 cents, July settled at 85.53 cents, up 2.97 cents and December 2023 ended at 82.63 cents, 2.15 cents higher; estimated volume was 33,720 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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