DTN Closing Cotton            01/18 13:58

   Cotton Higher, but Becoming Volatile

   Spot cotton posted new highs Tuesday, trading above $1.20 today for the 
first time since June 2011.

Keith Brown
DTN Contributing Cotton Analyst

   Spot cotton posted new highs Tuesday, trading above $1.20 today for the 
first time since June 2011. Old crop continues to trade out the fundamentals of 
a smaller 2021 crop and lower carryout. In addition, the market has seen robust 
weekly sales and shipments. All of its positive action was done in the fact of 
the Dow trading some 600 points lower.

   The market is hoping to see improvements in the shipping logistics situation 
and trying not to think about the possibility of cancellations. To that end, 
there have been some fears that if cotton cannot be timely shipped, China may 
cancel some purchases. To date, that has not happened.

   The U.S. dollar revived higher Tuesday. Currency traders are anticipating 
next week's meeting of the Federal Reserve to be the kick-off of higher 
interest rates.   

   Wednesday, the market will see monthly Housing Starts from the Commerce 
Department. Increased new home building could reflect greater commercial demand 
for cotton.

   Tuesday, March cotton settled at 121.08 cents, up 1.38 cents, July ended at 
114.66 cents, up 1.30 cents and December finished at 97.84 cents, 1.01 cents 
higher; estimated volume was 30,739 contracts.

   Keith Brown can be reached at [email protected]




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