Keith Brown DTN Contributing Cotton Analyst    

The cotton market was limit-up to sharply higher Wednesday, as, again, bottom-picking bulls, and wrongly-positioned shorts, were all net buyers, and volume was very heavy. At stake is whether the 2022 harvest low was posted in October. Seasonally, the low does tend to fall during the October/November/December window.    

The Federal Reserve, as expected, did raise interest rates three-quarters of a point. However, in its post announcement statement, the Fed indicated it would continue to keep pressing rates higher until inflation is beaten back to the 2% level.    

Thursday morning, USDA will issue its weekly export sales. Last week's business was pretty abysmal as only some 60,000 bales were sold, and China appeared as a net canceller.    

A technical aspect of the charts is the massive open interest position. For some time, open interest has been increasing to the point that now it has reached the highest level since February. Seemingly falling prices, coupled with increasing open interest, suggest new bearish traders are entering the market, Of course, by now, they may have built a huge short position that potentially may get worked off with even higher prices.    

For Wednesday, December closed at 79.00 cents, up 4.00 cents, March 2023 finished at 78.64 cents, up 4.00 cent and July 2023 settled at 78.72 cents, 3.74 cents higher; estimated volume was 66,930 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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