Cotton prices broke lower on the week, but remained within the important 82-88 cent trading range. While I had expected the price break to be to the upside, the all-important technical picture still held as the market resisted the attempt for the December contract to break below the 82 cent support level. A small chink in the technical armor was left as the long term trend line drawn from the November lows was broken. Yet, that chink is very minor in that the July contracted was expected to lose value relative to the December contract. Too, with the nearby July contract within three weeks of going to First Notice Day, the long trend uptrend will likely reestablish itself by mid-June.

The long term drought in Southwest draws more and more attention as the key first week in June “moisture deadline” nears. There have been local showers, but most reports of any widespread rainfall are absent and most showers are generally no more than ¼ on an inch; not enough to even settle any dust. Too, the irrigated acreage is expected to be under more stress this season as this will be the third consecutive year with little to no recharge of some aquifers.

Cash sales picked up at weekΆs end going into the three day weekend with the Memorial Day holiday this Monday. The market will be closed, but foreign mills are expressing a need for cotton and prices should begin next week on a high note due to the expectations fixations that will be associated with the three day holiday.

Chinese mills, in particular, have revved up their buying both locally and for US cotton. Some have expressed concern regarding a slowing Chinese economy. Yet, when the Chinese economy slows itΆs still the equivalent to 85 miles per hour; too slow for dog catchers, but still sucking up most of the cotton around.

The Midsouth and Southeast continue to be plagued with too much water, but planting progress is easing forward. Yes, the crops in those regions are behind, but literally the entire growing season is still in front of us. Just one excellent week between now and August will get things back to normal. Additionally, with above normal temperatures expected over the next week, the crop could be near normal just a week from now. The entire season is in front of this crop just yet.

This is not the time to forward price any 2013 crop. Prices will rebound to the mid-80s and then make that run to the top of the trading range. I am not throwing in the towel by any stretch of the imagination.