DTN Closing Cotton            09/16 13:33

   Cotton Market Choppy to Lower Wednesday

   The cotton market was choppy to lower Wednesday, albeit the session showed 
very moderate volume.

Keith Brown
DTN Contributing Cotton Analyst

   The cotton market was choppy to lower Wednesday, albeit the session showed 
very moderate volume. Traders will assess today's Fed action and then focus on 
exports-sales and the CFTC update.  

   The Federal Reserve did approve its first interest rate hike in more than 
three years and indicated another to come. The increase is part of an effort 
aimed at combating inflation brought on by spiraling oil prices and other 
factors.

   In a move that markets widely anticipated, the central bank's Federal Open 
Market Committee voted 12-0 to increase its key interest rate by a quarter 
percentage point, or 25 basis points. The move brought the overnight funds rate 
to a target range of 3.75%-4%.

   Tomorrow at 8:30 a.m. EDT, USDA will release fresh exports-sales data. Last 
week's report showed combined seasonal sales of 76,318 bales. That amount was 
up from 27,525 bales sold in the previous week. Currently, cumulative sales 
have reached 38% of the USDA's current marketing year forecast versus a 
five-year average of 47% at this juncture of the season. 

   On Friday, the CFTC will update its closely watched Commitments of Traders 
Report. Last week's data showed managed money traders were net sellers of 7,807 
contracts, which reduced their net long carry to 100,170. Their record stands 
at 108,788 contracts. 

   China's State Reserve had a second auction, which did not sell out but was 
almost 97% sold. Today was the 42nd auction. Offers were 35,274 bales, while 
purchases tallied about 34,117 bales. Total sales thus far stand at about 
1,479,575 bales.

   For Wednesday, December closed at 84.36 cents, minus 12 points, March 2027 
finished at 86.89 cents, off 10 points, and July 2027 settled at 88.04 cents, 
unchanged. Wednesday's estimated volume was 40,922 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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