Mary Kennedy DTN Basis Analyst

May 26, 2023

The cotton market lost more ground Thursday, as beneficial weather, no results on budget talks and more concern over rising interest rates continues to pressure the market. 

DTN weather forecast for the Delta notes soil moisture continues to be mostly favorable for developing crops. Drier conditions have developed in the region and are likely to continue for the next week. Shower potential returns next week. 

Overall conditions continue to be good across the region for developing crops for now. Thursday's update of the U.S. Drought Monitor continued to show extreme to exceptional drought conditions over the southwestern Plains, but moisture improvement was noted in western Texas and around the Texas Panhandle. 

The U.S. dollar traded higher again Thursday, after hitting a new high yesterday. The market focus remains on the talks over solving the U.S. debt ahead of the June 1 deadline for default. 

DTN Lead Analyst Todd Hultman noted that, "Debt ceiling talks may be a concern for cotton traders as a government shutdown could strain relations with China as China is the No. 2 holder of U.S. Treasuries, behind Japan."

Thursday's weekly export-sales report for last week was down 1% from the previous week and down 35% from the prior four-week average. Thursday morning's export sales report showed 131,200 running bales of cotton export sales for 2022-23, with China as the top buyer. On Thursday, December 2023 ended at 78.50 cents, down 1.78 cents. (Source: