Keith Brown DTN Contributing Cotton Analyst    

The cotton market ended slightly higher Tuesday, but there exists a bearish undertone. The market is trying to extend its upside rally based on hot-and-dry weather conditions across Texas, but a strong U.S. dollar, massive COVID-19 restrictions in China, and a weakened Dow Jones are casting doubts.    

The U.S. dollar posted fresh life-of-contract highs Tuesday. Next week the Federal Reserve meets, and odds are 100% it will raise interest rates by 50 basis points.    

China has reported 20,261 new coronavirus cases for April 24, according to China's National Health Commission. The government has ordered mass COVID-19 testing across Beijing starting Monday. There are fears of a Shanghai-style lockdown after several cases were detected in the city.    

The energies reversed sharply higher today, prompted by the Biden administration's order to block the expansion of oil and gas drilling in the National Petroleum Reserve in Alaska. In effect, this action will limit land available for drilling to half of the reserve's territory and halt drilling in certain reserve areas in Alaska. The decision reinstates a 2013 development plan for the National Petroleum Reserve that allowed drilling activity on 11.8 million acres instead of the whole 22.8 million acres.    

May cotton settled at 142.53 cents, up 1.12 cents; July closed at 135.68 cents, plus .27 cent; and December finished at 118.71 cents, .43 cent higher. Tuesday's estimated volume was 16,868 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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