Keith Brown DTN Contributing Cotton Analyst

December 7, 2022

The cotton market's early morning rise gave way to corroding outside markets. The Dow Jones, energies and metals all traded sharply lower amid rising fears of inflation. Meanwhile the U.S. dollar traded higher. Many investors are thinking they are seeing the proverbial handwriting on the wall regarding higher interest rates and recession. Last week's strong jobs report and Monday's manufacturing data began to set the bearish pace.

However, over the next few days, new PPI and CPI will be issued just in time for the Federal Reserve's meeting on December 13. Spot December cotton remains in its delivery period. There were no notices issued Tuesday. To date there have been only five notices tendered against the spot contract. Delivery runs through December 7, the expiration date for the contract.

This Thursday, USDA will issue its weekly export sales report. Of late, U.S. sales have been terrible, being a net negative 109,000 bales two weeks ago, and less than 30,000 bales sold for last week.

Exports will be out at 8:30 a.m. EST. In addition, tabulators will update the latest supply-demand numbers on Friday with the report released at 12:00 p.m. EST. The energy sector continued to rip lower Tuesday. In fact, global oil prices slid to their lowest since January.

There are big concerns that a slowing world economy will offset any would-be bullish effects from an EU-led price cap on Russian oil sales. For Tuesday, December closed at 85.39 up 0.45 cent, March 23 finished at 84.59, up 0.73 cent, and July 23 settled at 83.66, 1.07 cent higher. Tuesday's estimated volume was 24,131 contracts. (Source: