By Keith Brown, DTN Contributing Cotton Analyst 

The overnight hurdling of the Trump tariff high of 94.82 cents sparked additional speculative buying Tuesday. Moreover, fixation buying was done by certain textile mills as well. The end result was December cotton traded at 96.71 cents, a near nine-year high. However, by session’s end, the ICE futures had coughed up a sizable portion of their earlier gains.

Traders are beginning to think West Texas will indeed produce a bumper crop. Last night, key growing areas of Texas did receive very beneficial rains. In fact, some gin managers there now suggest a record dryland crop is in the making.

Such ideas are being backed up by the latest crop condition data from USDA. The agency is rating the Texas crop at 64% good to excellent. That is higher than last week’s 63% good-to-excellent reading, and well above the 10-year average of 33% good to excellent.

The next opportunity for any additional bullish news for cotton comes this Thursday when USDA issues its weekly export sales. Although there have been a few daily reports of soybeans being purchased by China, cotton and corn business has been scant.

The Dow Jones was sharply lower Tuesday, as traders are beginning to fear new hikes in interest rates. Several governors have openly suggested another strong jobs report will cause the Federal Reserve to consider such a move before the year is over. Those beliefs sent the U.S. dollar to trade within 30 ticks of its annual high.

For Tuesday, December settled at 94.90 cents, up 0.59 cent, March ended at 93.73 cents, plus 0.47 cent and December 2022 ended at 83.92 cents, 0.09 cent lower; estimated volume was 41,216 contracts.