Archive by tag: cottonReturn

Cotton Prices Stable, Demand Increases

Cotton trading turned a bit puny all week as the May futures contract moved closer to expiry and the July contract prepared to become the spot month.   Open interest in the May contract has quietly dissipated.  Thus, any expected fireworks on the May contract have been all but abated and the expiry will be silent.  Delivery notices can be issued at the conclusion of trading on Monday, April 23.   However, the July contract remains supported by the bullish on-call sa...
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Growing Demand Moves Cotton Prices Above 78 cts

Cotton posted gains on the week as the old crop May and July futures contracts traded within the 82.5-84.5 cent range and closed above 83 cents.   May was impressive as it moved through the fund long roll positions (sell May/buy July) and posted gains despite the selling pressure created by rolling positions to the July contract.  In fact, the May contract is suggesting that the market is facing a price inversion (the nearby contract is higher than the next contract).  Mill d...
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After A Volitile Week, Cotton Prices Remain High

Cotton prices fought the battle with volatility all week, but settled higher as both the old crop May and July contracts settled above 82 cents.  The new crop December contract traded above 78 cents, but settled the week at 77.94 cents. Fundamentals remained much the same as the prior two months, very strong export sales and even stronger shipments, coupled with active on-call sales. Yet, on-call sales across all futures contracts declined during the week due to heavy fixations on the May c...
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Q1 Ends with Higher Cotton Prices

Cotton trading continues mixed, but all contracts settled higher he end of the first quarter of the year.  Earlier the nearby May and July contracts slipped below 81 cents, but finished the week challenging the 82 cent mark.  The new crop December contract clawed its way back to just below 78 cents and the week’s fundamental news purports to push the December futures contact above 78 cents, the price level we had advised to growers to begin their pricing. USDA’s annual pros...
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Cotton Prices Still Rising, Despite Increased Planting

Plant…Plant…Plant continues to be the motto, but it is also time to add Price…Price…Price to the discussion.   The new crop December contract took a hit this week, but settled at week’s end above the trend line, thus keeping the uptrend in force.  The market faced an uphill battle all week, and actually lost some momentum, but came back at the end of the weekly trading period to post a close above the December trend line.  Thus, while the bul...
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WASDE Predicts Declining Exports; Insiders Disagree

Not since Van Lingel Mungo threw his last pitch for the Brooklyn Dodgers had the cotton market seen a curve as sharp as that thrown by the Foreign Agricultural Service (FAS), USDA in the February WASDE report.  As cotton sales and shipments zoomed higher USDA lowered its already industry lagging export estimate from 14.8 to 14.5 million bales.  For their reputation I hope they are correct and I am wrong.  For the U.S. cotton grower, I do hope they are incorrect. I am already very ...
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World Demand Keeps Cotton in the 72-76 cts Range

With apologies to Mr. Rogers, It’s a wonderful day in the neighborhood and the cotton market has been mine.  What a roll.  Despite the bearish interpretation of the past two WASDE reports, price action on ICE has clearly demonstrated that price decisions should be focused on the declining level of world stocks and the ever increasing world demand.  Yet, it is difficult not to focus on “today’s” fundamentals suggesting on the big U.S. carryover.   ...
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Cotton prices inch up to 70.5-71 cts level

The long awaited rally above 70 cents appeared to mature this week as the March contract has gained five cents just since November.  I am reminded of my friend that sold his cotton in November and then commented that the market would now go up.  It did and prices have continued to move higher.  Most growers are thankful for him finally pulling the pricing trigger.  This was a significant week as the market continued to build on its price consolidation phase, cleansed itself o...
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Cotton Prices Move up on Tightening Stocks

Driven by tightening world stocks and led by an ever increasing world consumption, cotton prices continue to move higher.  The nearby March contract settled the week 73.28 with the 2018 July at 74.05.  Export demand continues to drive the market as US growths are the most price competitive in the world.  U.S. merchants and cooperatives continue their very aggressive basis offers to mills as mills add to their near record pace of on-call sales.  The backdrop behind the expandi...
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Decline in World Stocks Supports Cotton Prices

While the U.S. crop was judged higher, as was U.S. carryover, the more important decline in world stocks led the market higher. Thus, as expected, the long held five cent trading range 65-70 (+/-) cents will continue, most likely into the December supply demand report on December 12, 2017. Further, there is presently little reason to expect the very tight 67-70 cent range to be broken, other than such a narrow range is typically short lived.
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