Cotton Closes Near Session Lows

Pressure from a stronger U.S. dollar index had the cotton market on the defensive Thursday.

General Comments:

March cotton closed 0.26 lower at 62.99 with May 0.26 lower at 63.79. March corn closed 4 1/2 cents higher, January soybeans finished 14 1/2 cents higher, and March Chicago wheat closed 1/2 cent higher.

The U.S. dollar index was 1.356 higher at 99.227. February gold was $25.60 lower at $1,051.20 while March silver was $0.523 lower and March copper was $0.0285 lower. The Dow Jones Industrial Average was 138 points lower at 17,611. January crude oil was $0.58 lower at $34.94.

Comments:

The sharp rally in the U.S. dollar index led to increased selling in most commodities Thursday, though some were able to uncover buying interest over the course of the session. Such was not the case with cotton where contracts finished near daily lows on light selling from both commercial and noncommercial traders. Weekly export sales and shipment numbers showed mixed results with sales still running bearish and shipments showing an uptick from previous weeks. Despite that, the trend on futures spreads remains down indicating a strengthening carry and reflecting a more bearish commercial view of supply and demand.