The 2020/21 season ends, as it began, in confusion. 

The WASDE report of last week did not weigh on the market as much as one might have thought given the numbers that were reported, most notably a US crop that continues to recover and will probably finish over 18 million bales. 

In the cotton market there is not much news to report. It is in the financial markets where we are seeing aggressive moves brought about by the smallest of news events. Indeed, in a buying frenzy led by hedge funds, the market has returned to the highs of the season while the prevailing sentiment is much more mixed. 

As with all agricultural commodity markets (except coffee, where a frost in Brazil is leading to production issues), wheat, soybeans and cotton are due for a severe correction. 

Usually, this pivotal period between harvests is when we see the lowest prices of the season, but this year it may be different, despite the fact that the fundamentals have not changed. 

Producers now have a great opportunity to sell their crops at levels they could only dream of. 

Of course, our reasoning only holds if the weather conditions remain satisfactory. The slightest gust of wind or a darker than usual cloud will be carefully scrutinised in such a febrile environment. 

Furthermore, the rise in the US dollar and oil (following the failure of the OPEC talks) should allow the markets to take a breather. 

At this point we are reasonably bearish for the coming months.