By Keith Brown, DTN Cotton Correspondent 

The cotton market finished moderately lower Wednesday as traders sold the ICE futures upon seeing some rainfall across the West Texas area. Although the next few days do hold some other chances for rain there, the longer-term outlook suggests a return to drier conditions. The other shoe to drop was the massive liquidation in bitcoin and related cryptocurrencies.

Overnight, China banned the use of such digital currencies in that country. While there is no direct correlation between bitcoin and cotton, China’s action did upset the financial market, and drive the U.S. dollar higher.

Thursday morning USDA will issue its weekly export sales. Current season sales have reached 100% of USDA’s target, but obviously the market wants to see more buying participation from China. As it stands, the market seems pretty comfortable in the 80- to 85-cent area until other price-moving fundamentals emerge.

The U.S. dollar was higher Wednesday, no doubt a result of the spill in bitcoin. Those two markets actually behave opposite to one another. In fact, the ultimate goal of bitcoin and related digital values is to replace paper currencies.

As the month of May begins to fade, traders are highly anticipatory of the forthcoming June reports from USDA. Besides the normal weekly export sales each Thursday, USDA will issue its June supply-demand report on June 12. However, the “biggie” has to be the planted acres data of June 30. In that release, traders will truly see if corn and soybeans did rob cotton of its significant acreage.

Wednesday, July cotton closed at 82.92 cents, down 1.09 cents, December settled 82.73 cents and March 2022 ended at 82.20 cents, down 0.80 cent; estimated volume was 27,102 contracts.