ICE was stable over the course of last week finally settling at 82.82 c/lb on July, up 39 points. 

With the fall in the futures demand has been good from a variety of markets with the basis also improving slightly. In India it was also reported that 2k mt of WAF cotton was sold to mills in the South, could India be returning to the import market in any significant way? 

The US dollar has again been weak with this forecast to continue. Inflation expectations are the main driving component of this weakness as the FED continues with its quantitative easing program. A weak dollar should help to lubricate the commodities market as the goods and services bought in US currency become cheaper. 

Rains have continued across much of Texas though it still remains too dry in the Southeast and more is needed throughout the season for planting to continue. The US will need a lot more rain to achieve the 17 million bales forecast in the WASDE of May. The image below shows the drought now when compared to the same time last year.

The July/Dec invert finally saw a reversal and is now in contango. The rains in Texas as well as a 30% increase in certified stock could explain this reversal. 

In Pakistan the first local cotton for the year was traded for an end of June delivery at around the 94 c/lb level. Local estimates on production remain poor at around the 7 to 8 million local bales mark and Pakistan has been looking for imports over the course of last week. 

Togo this week reported a 43% drop in production for the 20/21 season to only 27k mt of lint against 50K mt produced last year. Plans are in place to increase the production to nearly 100k mt of lint by 2025. 

There are short term factors that are supportive to commodities. Lockdowns have meant that consumer spending in rich countries has switched from services to goods, increasing demand for the raw materials including textiles. Consumer spending is also set to drastically increase as lockdowns ease and with consumer savings at record highs. 

With that in mind, consumption of goods including cotton could resume drastically, but will it be enough to absorb the large global stocks? 

Consumption so far this year has come in waves, mostly affected by lockdowns in consuming countries. It has not been a steady and consistent return to full consumption. 

The weather in the US is dominating price movements for now and the market could be volatile until such a time a