Record Harvest Weighing on Cotton Futures

American retail clothing stores may see more down side in prices as record cotton harvest are being realized around the world.  Cotton supply is said to be exceeding demand not seen since the 1990’s.

The USDA estimates cotton supplies to be 15M bales in excess and adding to the global stockpile by 32% – the second largest amount on record.  Analysts estimate cotton futures to drop to a price of .75c per pound by the end of this year.

Record harvests with cotton are going to put some more pressure on the market. It is possible that the cotton market can become very bearish if we take out the last near term lows around the 84.25 area.  Now would be a good time to get some exposure to the short side either through (cotton) futures or options,” stated Chris Hildebrand, vice-president of trading at HighGround Trading Group in Chicago, regarding the current cotton futures situation.

The trend for cotton futures continues downward, albeit a snail’s pace.  Looking at a cotton futures weekly chart, I can’t help think this market is in for a turn-around – maybe caused by another event.  I’m trading this cotton futures market with caution.

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