Both High and Low Grades See Strong Demand

Cotton prices continue to follow the surge in exports that is being driven by worldwide demand for cotton and particularly the strong demand for U.S. cotton.  U.S. high grades have effectively been sold out as evidenced by the small level of certificated stocks and the emergence of a very strong taker of delivery notices issued on May contract.  Export demand is further boosted by the abundant supply of U.S. low grades comprised of low micronaire and barky cotton.  The demand for ...
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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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Cotton Prices Push Past 82 cts on Strong Demand

Exceptionally strong demand continues to underpin the bull’s hopes for higher prices while the bears are supported by the idea that market trading has become dull and listless in its attempts to break out above the highs established two weeks ago.  The market’s misunderstanding of tariffs and the resulting Wall Street attitude has also kept the market skittish.  The 82 cent plus level has provided excellent price support for both the May and July futures contracts as mills ...
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Speculation Drives Up Cotton Prices

Cotton captured the attention of commodity speculative funds all week as USDA reports were bullish to neutral and prices returned to the prior month’s highs, posted new highs, and triggered technical signals of yet higher prices.  However, we must caution that prices have moved only about a cent above where the market failed on its last leg up.  Presently, the fundamentals of supply and demand offer a brighter outlook than six weeks ago, but open interest, while increasing, has b...
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Rising Cotton Consumption Drives Prices to 81 cts.

Prices regrouped on the week with the nearby May trading to 81 cents and the July contract eased up to 82 cents.  World cotton consumptions continues to expand it wings as growth is now evident expected across all major continents. Speaking of wings, those feeding me crow can now finish the pie. At least mine has morphed into Old Crow.  Yes, it was scary for a couple of weeks.  The market advance is back on track as prices again trending higher.  The short term trend is up an...
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Cotton Reestablishes Its 76 cts Base

ICE finally had an up to end the week, suggesting that the final leg of the downside move had ended and the three week downturn was basically over.  I had expected that a 76 cent bottom would catch the tail end of the move, but the March contract, moving into its expiry settled the week at 75.72, a few ticks below our 76 cent bottom.  With March index rolls completed and the National Cotton Council’s recognition that the world cotton industry has questioned the USDA India databas...
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