Australian Drought May Affect Cotton Futures

Cotton futures are also being affected by the Aussie drought.  Cotton production from the world’s third-biggest exporting country is expected to be set back 9% this year as weather conditions curb planting in Queensland.

An cotton industry spokesman there claims cotton farmers will pick 400K less bales than they did for the 2012-2013 growing season.  Our USDA says to expect world cotton production to drop in the 2013-2014 growing season as our domestic cotton crop will be the smallest in four years.
           
Cotton futures are poised for a possible rise due to drought concerns during the planting season in Australia. Additionally there are concerns for a smaller U.S. crop, which is in the harvest season,  as the heavy rains are pushing back the harvest progression, leaving the cotton vulnerable to the coming winter weather,”  said Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the current cotton futures situation.

Cotton futures have been trending lower starting by that big price break mid-August.  Cotton futures may be at a crossroads though needing, perhaps, some type of retracement higher to test last month’s highs.  I am short cotton, but will be nimble.

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