Keith Brown DTN Contributing Cotton Analyst    

The cotton market was sharply higher in its early session Monday, and was close to challenging Friday's high, but outside negativities reversed attitudes and prices. Generally speaking, the collective markets are right back concerned with higher interest rates. Friday saw a strong jobs report, then Monday there was a stronger-than-expected U.S. manufacturing report. Both were considered inflationary, and therefore bullish to higher rates and a higher U.S. dollar.    

There are other economic reports out this week, which might influence the Federal Reserve's interest rate decision next week. On Friday, the December PPI data will be issued, and on Tuesday week, a new CPI report is out.    

The overnight higher surge in the Chinese stock markets ought to be an underlying positive force. Last night the Hong Kong market was up three percent, as expectations for relaxed COVID restrictions are running high.    

Energy prices pared gains on Monday, following U.S. stock markets lower, after a U.S. service sector report (ISM Manufacturing) heightened worries that the Federal Reserve could continue its aggressive policy of tightening interest rates. The news caused both oil and equity markets to trade lower.    

For Monday, December closed at 84.94 cents, up 0.66 cent, March 2023 finished at 83.86 cents, up 0.66 cent and July 2023 settled at 82.59 cents, 0.60 cent higher; estimated volume was 19,408 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com

(c) Copyright 2022 DTN, LLC. All rights reserved.