Volatility dropped this week, as the market is discounting a scenario in which prices are not expected to change significantly over the coming months. Once all harvest is complete and sorted out, we may see renewed pressure on cash prices.
Cotton trading remains locked in a rather wide ten cent trading channel, but actively trading only a four cent band around 63 cents – 61 to 65 cents, that is. In other words, maybe we are being lulled to sleep.
December prices should remain on firm footing until the bulk of the U.S. crop has been harvested and the quality is known. But the massive global inventory probably means a sideways-to-lower market going forward.
