Cotton Summary: March 23, 2023.
Cotton futures traded higher even rallying as high as 79.80 in early US trading before stalling and settling into a trading range between 78.40 and 78.85 into the Fed policy rate decision. After the 25 bps increase to 4.75-5.0% range, prices initially firmed but stayed below the early highs and eventually settled back +43 at 78.28. In addition to the quarter point rate increase, the Fed kept its terminal target rate unchanged at 5.125% saying additional policy firming may be appropriate while removing any mention of ongoing increases. Traders now turn their attention toward the US Export Sales and Shipment report to see if the US sales and shipment pace can remain as strong as the past few weeks. The US needs to average weekly sales of approximately 138k per week (allowing for an average five- year sales carryover) and shipments of approximately 275k per week to reach the USDA’s 12.0 mb projection.