By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market finished Wednesday’s session higher, but not before it initially traded limit up, then spilling to nearly unchanged, and then up again. No question that emotions, anxieties and knee-jerk reactions highlighted the trading. Volume was strong at 70,000-plus contracts. Of course, the background fundamentals that are driving the center on pricing are inflationary conditions, reduced global production and perceived strong demand from China.

USDA will issue its weekly export sales Thursday morning. Last week’s data showed sales jumping over their weekly average pace of 300,000 bales to a net sold amount of 571,400 bales. That level was up 65% from the previous week and 92% from the prior four-week average. The top buyer was China at 418,600 bales. Naturally, traders hope to see similar numbers Thursday. Yet, China has been closed for Golden Week, although given it runs 24 hours ahead, its market likely opens tonight.

Friday’s CFTC update will prove very insightful. Of late, speculators have really swelled their net long positions. Their aggressive buying has allegedly placed a tremendous financial burden on textile mills with substantial fixation orders. However, if the funds become excessively “weighty,” they themselves could instigate a price correction.

For Wednesday, December settled at 111.06 cents, up 2.13 cents, March ended at 108.17 cents, plus 1.58 cents and December 2022 ended at 88.12 cents, 0.75 cent higher; estimated volume was 73,978 contracts.