DTN Cotton Close: Moderately Lower on Melting Dow
January 24, 2022
The cotton market was off less than 0.50 cent, despite the fact the Dow Jones collapsed over 1,100 points! The bearish driver of the Dow was the potential that Russia invades Ukraine. Monday, many NATO countries are sending supplies and troops toward Ukraine as a deterrent to the Russians.
Even the U.S. is mulling the notion of sending 5,000 soldiers. So, the geo-political seesaw upended many markets Monday. The fact that cotton held up under such outside pressure is somewhat impressive.
The Federal Reserve will hold its two-day monetary policy meeting starting Tuesday. Then, on Wednesday, chairman Powell will emerge to announce any policy changes. It has been widely touted that the Fed is destined to raise rates several times this year. The implication of hiking rates is that such action typically strengthens the U.S. dollar.
Traders are also anticipating this Thursday’s export sales. Last week’s sales were not as dynamic as the week before, but actual shipments were definitely stronger. The improved exports number was taken as something of a testament that the supply-chain crisis is, slowly but surely, working itself out.
Monday, March cotton settled at 120.38 cents, down 0.37 cent, July ended at 115.22 cents, down 0.22 cent and December finished at 98.36 cents, 0.49 cent lower; estimated volume was 33,660 contracts.