Keith Brown DTN Contributing Cotton Analyst
August 18, 2022
The cotton market was limit-down for a moment Wednesday, but then staged a slight comeback to finish some 3.00 cents lower. After Tuesday's record volume, replete with a third limit-up moment, Wednesday traders were quick to book profits, while some sold, hoping to pick a top.
Thursday morning, USDA will issue its weekly export sales. Last week saw net sales for 2022-23 at 102,400 bales. The top buyer was Vietnam. A total of 2,387,800 old crop bales were rolled over into the new season. Weather-wise the short-term forecast allows for rain across much of Texas.
The Panhandle is anticipating as much as 2 inches-plus, while the western part of the state is looking for moderate precipitation of a quarter to a half-inch. The six- to 10-day and the eight- to 14-day are both indicating below-normal temperatures and above-normal rainfall. Also Thursday, NOAA will update its Weekly Drought Monitor.
The Federal Reserve released its minutes from its July meeting Wednesday afternoon. Essentially the text indicated that the Fed likely would not consider pulling back on interest rate hikes until inflation came down substantially.
During a meeting where the central bank approved a 0.75-percentage-point rate hike, policymakers expressed resolve to bring down inflation that is running well above the Fed's desired 2% level. After the release the Dow Jones slightly eased lower, while the U.S. dollar traded higher. For Wednesday, December closed at 113.54 cents, down 3.31 cents, March 2023 finished at 110.27 cents, down 3.08 cents and July 2023 settled at 102.56 cents, 3.64 cents lower; estimated volume was 60,516 contracts. (Source: qualitygin.com)