Lower Stocks Support Cotton Prices

Cotton prices caught a break this week from what many called a neutral world supply demand report. The declining volume of world cotton stocks was the highlight of USDA’s October report and rode the wave nearly 200 points higher as it pressured the 79 cent level before settling the week at 78.37. Adding to bullishness of lower global stocks was the likely damage caused by Hurricane Michael’s destruction in southeast Alabama and some catastrophic destruction in big cotton plantings in...
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Cotton Prices Weaken, US-China Tariffs Blamed

There is a crisis in the Cotton Belt.  There is a crisis in the Heartland.  Agriculture is leading the charge to disaster.  Every morning begins with the chimes of two thoughts: I am wrong [about] trade and consequently I am wrong [about] the market.  We had considerable success earlier in the year and fixed the bulk of the crop between 80 and 94 cents, basis December.  Yet, I also felt that the December futures would rally and challenge 80 cents and above.  Too, I ...
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Cotton Prices Slide, Despite Declining Stock Levels

Where is Billy Dunavant when we need him?  Cotton prices have taken nearly a ten cent nose dive, a 1000 points, in the past three months.  In the face of this, world ending stocks have decreased and world consumption has increased.  Too, expect stocks to further decline.  Yet, U.S. export sales have stumbled and record forward sales are history as new sales appear to be dying on the vine.  We can trace it back to the tariff.  Worse still it appears that December cou...
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Cotton Market Jittery Over US-China Trade Tensions

Tariff nervousness plagued the cotton market all week as December futures momentarily broke below long time support at 79 cents.  However, going into the weekly close, the market was trying to hold the price support line.  Prices are hovering around that level so all is not lost just yet.  I was one of those suggesting that the market would not suffer from the tariff as world cotton trade needs the U.S. crop that otherwise would have gone to China.  I was wrong.   F...
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Cotton Prices Continue to Amaze and Confuse

Cotton has become the contra-nowhere market...where she goes no one knows.  Yet, rest assured, the market is right.  It the market soothsayers like myself that are wrong.  The very narrow four cent trading range, 81-84 cents, basis December futures, remains in place.   It is teetering as if to be Humpty Dumpty.  The downside bias also remains in place.  The September supply demand report did little to spook the market lower, albeit was slightly bearish. &n...
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Uncertainty Drives Whipsaw Price Swings

Whipsaw price swings continue to haunt the cotton market.  Such price swings, characterized by triple digit day to day trading, will continue until the U.S. and world crop sizes are better defined.  Despite concerns surrounding the West Texas crop it is difficult to go against the USDA objective yield survey.  Until they change their estimate of crop size it is questionable to challenge the USDA-NASS survey results.  As we have mentioned in prior weeks, one should accept the ...
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Big Crops, Big Demand

Cotton added another muggy week to its trading linage, easily trading 100 points higher and then 100 points lower. As it cannot generate any clear direction.   Thus, the whipsaw price action continued and only the day traders seemed to care. The market is in search of new fundamental information with talk of crop size—some saw lower while others say higher, but with no one willing to stick their neck out with a firm commitment.  Too, the demand word has snuck back into the p...
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Mercurial Cotton Prices Baffle Buyers

It’s not pretty. The cotton market has degenerated to whip saw activity, triple digits up and then triple digits down, but with an ever so slight downward bias as it sits near a major price support point. The 81 cent support level is close to being challenged as speculators are reluctant to increase their long positions.  Additionally, there is a slight tendency of speculators to ease out of their long cotton positions, even as fundamentals favor a move back into the high 80’s.&...
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Cotton Prices Hit a Ceiling; Prices Hover in Low 80cts Range

The Thrill is Gone, The Thrill is Gone, so sang BB King.  From an exciting six months with promises of greatness, the cotton market is now hanging on with all the force it can muster.   The market provided growers a clear opportunity to price the 2018 crop between 88 and 94 cents multiple times and even climbed to a high near 95 cents.  Yet, the thrill is gone.  The opportunity to price in the upper five percent of the price range has been replaced with the opportunity t...
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Rising Cotton Supply Push Prices Down

Hold on. Wait a minute.  The expected bullish supply demand report had bear tracks all over it.  New crop was bigger than expected, old crop exports failed to materialize, and U.S. carryover was increased.  The bulls could point only to 1.) increased U.S. exports, 2.) smaller world ending carryover and that 3.) world consumption forecast at a record level.  In response to the report the market sank as prices fell some 200 points to near 85 cents.  However, demand remains...
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