By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market was sharply higher Friday, nearly regaining its losses of Thursday. Thursday the market suffered a steep nosedive on the news the Fed was leaning towards increasing interest rates, “eventually.” That sparked the U.S. dollar higher and caused a meltdown in many agricultural and financial markets.

The news that China had ordered certain domestic traders to liquidate their commodities holdings only added fuel to the fire. However, remembering that no farm crop has been solidified, most commodities posted a sharp rebound Friday.

Into next week, the market will see crop progress/crop condition numbers on Monday, followed by exports-sales on Thursday. Looking ahead, spot July enters delivery on the June 24, and the USDA issues its planted acres on June 30. To that latter report, traders are generally expecting a sizable reduction of 2021 cotton acres.

The U.S. dollar was markedly higher again Friday as bottom-pickers and short-covering drove the Index to its highest level since last April. A strong dollar is typically considered bearish to row crop commodities.

Through Friday’s settlement, December cotton finished 2.74 cents lower on the week, 1.86 cents up on the month and is up 11.48 cents on the year.

For Friday, July closed at 84.42 cents, up 0.25 cent, December settled at 85.18 cents, up 1.12 cents and March 2022 ended at 85.06 cents, 1.12 cents higher; estimated volume was 23,025 contracts.