DTN Closing Cotton            01/25 13:37

   Cotton Hangs Bullish Amid Dow's Seesaw

   Despite the wicked swings of the Dow Jones, the cotton market remained 
positive for most of Tuesday's session.

Keith Brown
DTN Contributing Cotton Analyst

   Despite the wicked swings of the Dow Jones, the cotton market remained 
positive for most of Tuesday's session. Conventional wisdom is beginning to 
echo the sentiment that if cotton can remain bullish throughout such financial 
storms, then it can indeed trade higher. However, with the Fed's announcement 
Wednesday, and the Russian/Ukrainian fuss still unresolved, traders are waiting 
to see what other shoe, if any, may drop.

   With the Beijing Olympics commencing on Feb. 4, we note that the Chinese 
government is buying additional supplies of cotton to overcome the 
international stigma associated with Xinjiang cotton. At stake is China's 
treatment of its Uyghur (Muslim) population. Much of the world has placed a ban 
on all cotton products coming out of that region, thus China is having to buy 
other growths from other countries.

   Wednesday afternoon, the Federal Reserve will issue its latest change, if 
any, to its monetary policy. It is widely thought that the Fed will initiate a 
plan to increase interest rates, with the first hike coming in March. higher 
rates typically result in a stronger dollar, thus weaker exports.

   Tuesday, March cotton settled at 120.92 cents, up 0.54 cent, July ended at 
115.76 cents, up 0.54 cent and December finished at 98.84 cents, 0.48 cent 
higher; estimated volume was 27,581 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




(c) Copyright 2022 DTN, LLC. All rights reserved.