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DTN Closing Cotton            05/25 13:43

   Cotton Up, Mills Fix

   July cotton was materially higher as mill fixation buying ruled the day 
Wednesday.

Keith Brown
DTN Contributing Cotton Analyst

   July cotton was materially higher as mill fixation buying ruled the day 
Wednesday. With spot July's delivery period a mere 20 trading sessions away, 
textile mills are having to buy the spot futures to offset previously 
established hedges. Thus, July was sharply higher and tugged new crop up as 
well. Of course, the rise with December is pretty much related to keeping the 
inter-crop spreads in balance.

   Thursday morning, USDA will issue its weekly export sales. For the past few 
weeks, China's activity has been noticeably reduced, while India has been the 
dominant buyer. In recent weeks, India has lifted import duties on foreign 
cotton, then has become an outright buyer of U.S. cotton to supply its textile 
industry.

   Speaking of India, it announced Thursday that it has no immediate plans to 
lift a ban on wheat exports. The world's second biggest producer of wheat 
recently banned private overseas sales, after an historic heatwave massively 
reduced output and domestic prices hit a record high.

   Weather-wise, the immediate forecast calls for no rain for West Texas, but 
the six- to 10-day holds better chances for rain, but also brings 
higher-than-usual temperatures. 

   For Wednesday, July cotton settled at 145.16 cents, up 3.62 cents, December 
closed at 124.61 cents, plus 0.83 cent and March 2023 finished at 119.95 cents, 
0.45 cent higher; estimated volume was 37,500 contracts.

   Keith Brown can be reached at commodityconsults@gmail.com




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