Cotton prices settled 100 to 200 points higher on the week as bullish fundamentals continue to build and speculative funds add to their already bullish positions.
No need to get bearish now. Chinese actions and Mother Nature seem to feel the mid-80s is good for cotton prices. The question is – can Mother Nature tweak it higher?
Prices continue to be volatile and will likely remain so. Drought and a potentially smaller Chinese crop are adding value to the 2014 crop.
The significant price inversion between the old crop July contract and the new crop December has declined to only eight cents.
Last week’s market moves were little more than panic trading. One is tempted to call this a roller coaster, but that phrase does not conjure up enough drama for the current market.
The market is looking to move above 94 cents, then jump to 96 cents. Yet, I would not hold my breath looking for 98 cents. As to how much the new crop December might tag along with the May contract, the new crop will be led by weather developments, not old crop prices.
There are certainly no dull moments in the cotton ring as bulls and bears constantly face the threat of triple digit price moves.
Cotton prices moved higher on the week, reaching a six month high as the March contract gave way to the May contract as the spot month. Attempting again to climb above 90 cents, the market – while remaining strong – again sent signals that the 87 to 90 cent level brought on more rationing from
Cotton prices eased higher near week’s end as Thursday’s rally brought the nearby March back above 86 cents. The week was highlighted by strong U.S. export sales, the firming of Indian prices, ideas that the US crop is not as large as forecast by USDA and increased talk of weather problems facing the 2014 crop.
The hit movie in 1989 was Field of Dreams, starring Kevin Costner and James Earl Jones. The movie was built around the theme, “If you build it, he will come.” Moving into 2014, the Chinese textile industry is broadcasting, “If you grow it, we will come.” Chinese mills continue to opt for imported cotton over