By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market closed down Wednesday but not before zooming higher earlier in the day. In fact, March cotton posted a new contract high. Of course, the bullish driver Wednesday morning was the Labor Department’s CPI report, which showed inflation levels had posted 30-year highs.

The CPI number, a measurement of a basket of products ranging from gasoline and health care to groceries and rents, rose 6.2% from a year ago. On a monthly basis, the CPI increased 0.9% against the 0.6% estimate. Annual core inflation ran at a 6.2% pace, compared to the 4% expectation and the highest since November 1990.

However, the U.S. dollar regained the lead as it experienced a strong up day. Traders felt with such high inflation numbers the Federal Reserve may be forced to hike interest rates sooner rather than later. Thus, the higher run in the greenback.

Thursday the U.S. government is closed for Veterans Day, thus there will be no marking news from USDA. Weekly export sales are delayed until Friday morning. Also Friday, options on spot December cotton will expire at the close. Currently, the $1.19 strike level for, both puts and calls, is in play.

For Wednesday, December settled at 118.68 cents, down 0.70 cent, March ended at 115.05 cents, down 0.14 cent and December 2022 ended at 91.20 cents, 0.11 cent lower; estimated volume was 58,227 contracts.