DTN Closing Cotton: Cotton Plays Follow the Leader
May 03, 2023
The cotton market played one of the oldest children's games Wednesday -- "follow the leader."
The cotton market played one of the oldest children's games Wednesday -- "follow the leader." However, in this case, it followed the "leaders" of crude oil and the Dow Jones down. Both of those markets were materially lower as fears of rising interest rates threaten to deliberately send the U.S. economy into a recession.
True to expectations, the Federal Reserve did hike its Fed funds rate by one-quarter point. It was the 10th consecutive increase in rates. However, in tweaked language, the central back somewhat signaled a pause in its rate program.
Thursday morning, USDA will issue its weekly export sales. Last week's report was something of an unexpected bullish surprise, as both sales and shipments were demonstratively higher. Turkey was the top buyer, with China second in line.
On Friday, the Labor Department will release its monthly jobs report. Current estimates are calling for 180,000 new jobs. However, lately, U.S. job growth has been falling off each month.
There were zero deliveries on the May Futures. That contract expires this Monday, May 8.
Wednesday, May 2023 finished at 76.99 cents, down 1.61 cents, July settled at 78.76 cents, down 1.61 cents and December 2023 ended at 79.04 cents, 1.45 cents lower. Estimated volume was 27,028 contracts