Reduced Plantings May Boost Cotton Futures

Farmers around the globe are said to be reducing cotton plantings, at a time when China is seeing increased demand for higher quality imports.  Cotton harvests are heading for the biggest drop in two decades because of the reduced cotton plantings.

Data from the Int’l Cotton Advisory Committee shows cotton crops tumbling the most since 1993 – 11% – in the fiscal year beginning August 1st.  By July next year, global cotton stockpiles are expected to shrink by almost 5% which will be the first reduction in four years.

Kevin Riordan, director of commodities research at Capital Trading Group in Chicago, has this to say regarding the current cotton futures situation, “Demand alone will drive up cotton (futures) prices higher later this year as China attempts to import cotton that is simply not  available to be deliver.”

Cotton futures are clearly in an “up-trend” at this time.  We bought cotton futures today on a pull-back, was also stopped out as the market continued lower.  Let’s be patient for a clearer picture of the dip in this market.


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