By Keith Brown, DTN Contributing Cotton Analyst 

The market tried for a recovery rally midsession but succumbed to new selling to finish markedly lower Thursday. Overall, cotton remains in an overbought condition dating back to the first of the year. Thus, after its strong rise during January and February, that condition became even more aggravated, thus the market suffered a sharp setback late last month.

Additionally, comments from Fed Chair Jerome Powell suggested inflation could rise as the curse of COVID-19 lifts off the U.S. economy. His words caused cash treasury yields to increase, and that in turned jumped the U.S. dollar higher. It is typically considered that a stronger dollar is negative to U.S. exports.

Friday, the Labor Department will issue its jobs data for March. Expectations call for 180,000 non-farms jobs created, while Friday afternoon, the CFTC will issue its latest commitment of traders reports. It should detail where the managed money speculators stand since the Feb.25 top.

Heading into the Friday’s session, thus far May cotton is 0.70 cent for the week and month, but up 9.45 cents for the year.

Thursday, May cotton closed at 87.14 cents, down 1.31 cents, July settled at 88.13 cents, down 1.28 cents and December cotton ended at 84.00 cents, down 1.01 cents; estimated volume was 39,301 contracts.