By Keith Brown, DTN Contributing Cotton Analyst 

The cotton market finished higher Tuesday despite USDA’s glowing rating of the crop’s condition from Monday afternoon. Currently, USDA has the 2021 crop pegged at 71% good to excellent, which rivals its modern-day record of 75% good to excellent set back in 1987. In addition, there were strong rallies Tuesday in the grains, energies, metals and equities.

Overall, the cotton market remains in a decisive uptrend, with heavy bullish participation from speculators especially the managed-money funds. The genesis of this bull market was the COVID-19 low of April 2020. Since that time, by means of chart technical, coupled with demand fundamentals, the market has rallied some 45.00 cents.

This Thursday/Friday, the Federal Reserve will hold its annual monetary meeting at Jackson Hole, Wyoming. There it will decide whether to taper (halt or restrict the buying of U.S. debt) or not. Either way, its decision will have a demonstrative effect on the U.S. dollar. Thus, potentially cotton exports are at risk. The greenback posted a 17-month high last week.

Weather-wise the six- to 10-day forecast shows normal rainfall for Texas, but above-normal precipitation for the Southeast. Temperatures are looking to be normal to above normal for Texas and above normal for the Southeast. The extended eight- to 10-day outlook pretty much holds similar patterns.

For Tuesday, December settled at 94.18 cents, up 0.82 cent, March ended at 93.18 cents, plus 0.49 cent and December 2022 ended at 83.60 cents, 0.35 cent higher; estimated volume was 22,274 contracts.