Keith Brown DTN Contributing Cotton Analyst    

Embracing an ever-deteriorating crop, traders nearly ran the market limit-up Tuesday. The impetus for the rally was Monday's crop condition report. Essentially it showed the nation's cotton crop is rated at 31% good to excellent versus a 10-year average of 50%. Moreover, with nearly 50% of the Texas cotton crop rated very poor to poor, it's pretty obvious the 2022 crop is "not coming back." Additionally, the Southeast crop will likely see hurricane troubles later on into harvest period.    

Wednesday morning the latest CPI data will be released. Headline CPI, which includes energy and food, is expected to dip to 8.7% in July, from a 40-year high of 9.1% in June, according to analysts.    

Thursday will see weekly export sales. Last week China canceled some 95,000 bales. With the Pelosi-Taiwan event diminishing, traders are hoping for some Chinese participation.    

On Friday, USDA will update its monthly supply-demand data. Last month, the 2022 crop was pared by some 1 million bales, but exports reduced too, keeping ending stocks steady at 2.90 million bales. Some traders are expecting similar action from the government this time as well.    

Weather-wise, the six- to 10-day and the eight- to 14-day forecasts have varying outlooks. The former calls for above-normal temperatures and normal to below-normal precipitation for West Texas, while the latter indicates above-normal temperatures, with normal rainfall.    

For Tuesday, December closed at 99.07 cents, up 3.48 cents, March 2023 finished at 96.27 cents, up 2.94 cents and July 2023 settled at 92.85 cents, up 2.66 cents; estimated volume was 29,248 contracts.    

Keith Brown can be reached at commodityconsults@gmail.com

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