The current trading range continues, as the market analyzes the impact of flooding in the U.S., continued dryness in Australia and the first initial official announcement by the Chinese government with respect to its new cotton policy.
The cotton market has been shrouded in plenty of uncertainty lately, which continues to drive its meandering sideways movement.
When folks in the cotton industry say polyester stinks, they now have the research to back the statement up.
USDA’s September World Supply Demand report gives us no reason to believe that the narrow 62 to 72 cents trading range will change in the coming month. But the market will likely draw its direction from Mother Nature in the coming weeks.
Based on USDA’s September Supply Demand report, a smaller U.S. crop should provide some support for prices. But an increase in total world production, reduction in use and increase in stocks may also weigh on the market.
Ongoing anticipation of the Chinese government’s announcement regarding price supports for the 2014 crop has driven cotton prices back near the bottom of the current trading range.
The market seems to be stuck in the middle of nowhere at the moment, as December cotton reflects the current tight transition period and the bears continue to pressure March pricing.
Dr. Carl Anderson, considered Texas’ leading cotton marketing authority and one of the nation’s leading cotton analysts, passed away August 30 at the age of 83.
The delay of deliverable 2014 world production supplies, coupled with limited availability of old crop export grade cotton, has kept a bit of a fire burning under the market.
As merchants and mills wait for new crop cotton to impact the market, they are finding out that supplies for nearby shipment are both pricey and hard to come by.