Keith Brown DTN Contributing Cotton Analyst    

The cotton market was sharply higher Wednesday as most commodities markets, from grains to metals to energies, positively responded to the CPI data. The Bureau of Labor Statistics released its information, which showed headline consumer price index for July rose 8.5% year over year and was flat compared to June number. Economists were expecting increases of 8.7% and 0.2%, respectively. Core inflation, which strips out volatile food and energy prices, also saw a smaller-than-expected increase. In response, the U.S. dollar sharply declined, while the Dow Jones shot some 500 points higher.    

Thursday, the government will issue its PPI (producer-price index) data. Traders are expecting that data to show a year-over-year decline to 10.4% from the previous 11.3% peak.    

Also on Thursday, USDA will issue its weekly export sales. Last week China canceled some 95,000 bales. The latest data has new crop sales at 4.828 million bales, the highest since the 2018-19 season.    

For Friday's crop report, 2022 cotton production is projected at 14.75 million bales, compared with 15.50 million bales in the July data. Ending stocks are expected at 2.17 million bales versus the July number of 2.40 million bales. World ending stocks are expected near 83.68 million bales, compared with 84.26 million bales in July.    

Weather-wise, the six- to 10-day calls for above-normal temperatures and normal to below-normal precipitation for West Texas. The eight- to 14-day forecast looks to have above-normal temperatures, with normal rainfall. However, at this stage of crop development some traders believe no amount of rain will help areas in West Texas.    

For Wednesday, December closed at 100.94 cents, up 1.87 cents, March 2023 finished at 98.42 cents, up 2.15 cents and July 2023 settled at 94.86 cents, up 2.01 cents; estimated volume was 30,899 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com 

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