Cotton Futures Extend Losses on Glut

Cotton futures slump may be nowhere near ending as cotton finds its fourth straight year of surplus production.  This glut appears to be good for retail business, but has created the biggest drop of Chinese exports since the beginning of this new millennium and adding to record global inventories.

The USDA reported earlier this month cotton stockpiles will jump just under 9% for the 12-months ending in July.  This revelation has prompted analysts to estimate cotton (futures) prices to fall close to 9% as well by the end of this year.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, had this to say regarding the current cotton futures situation, Supplies of cotton remain high, and a slowdown in exports have lead to the recent (cotton futures) sell-off.”  Craney added,Support has been found on the chart, however, prospects of fresh buying will be dependent on export demand from overseas.”

The trend for cotton futures has just rolled over to a new down-trend just yesterday (in my work).  It has been a roller coaster ride in this market which was in a climbing “up-trend” only a week-and-a-half ago.  We need this market’s dust to settle before hopping aboard.


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