Vigotex - Cotton News 07/09/2022

• ICE 2022 Dec: Closed 101.62c/lb, -1.93cents;
• ICE 2023 Mar: Closed 98.55c/lb, -1.83 cents;
• ICE 2023 Mar: Closed 93.66 c/lb, -1.35 cents;
• Estimated volume : 28,803 contracts.

The cotton market was sharply lower Wednesday, resulting in the December contract making a new price low for the move. Currently, the market lacks any sort of bullish energy amid the strong dollar and the weaker Chinese Yuan. Last week China's central bank "lowered" interest rates causing that currency to fall to a new two-year low. Thus, a weaker Yuan versus a strong U.S. dollar certainly jeopardizes future exports business.

Technically speaking, December cotton is fast becoming oversold, given it has fallen some 16.00 cents since late August. The last CFTC report did show that managed-money funds had added to their new long positions, and so their disappointment is being reflected in the current bearish trading action.

Next Monday, USDA will update its monthly supply-demand situation. Interestingly, despite the huge reduction in the 2022 crop in the August report, some private analysts are suggesting the government tabulators may be adding bales back to the crop. In its August data, USDA slashed U.S. production by nearly 3 million bales.

Weather-wise, No. 2 producer Georgia is expected to see heavy rains this week. Moreover, some parts of Alabama and Mississippi are also expected to receive moderate rains. Such conditions could prove detrimental to the current opening bolls.