Cotton maintains a strong export demand despite uneven planting and dry weather.
By
Cotton
Cotton was higher again last week, and trends are up on the weekly charts. It was an explosive rally, and futures are now trading at levels not seen since 2014. Ideas are that US cotton especially is in a bad spot due to the extremely dry and hot weather in western Texas. The current weather is less than ideal in West Texas as hot and dry conditions continue and is not good at other producing areas around the world. The Southeast US is too wet but began to dry out over the weekend. The weather is bad in India and China, with big heat seen in India and Pakistan and too much rain in China. Lost Chinese production could mean increased sales for the US, especially now that the US will have the quality the Chinese need.
Futures traders are looking at a market that still has strong export demand and has seen some very uneven planting and growing conditions in the US. Much of the Southeast and parts of the Delta have seen big rains, especially in the last couple of days. Texas has seen some precipitation, but dryland areas are still very dry. Temperatures have turned hot. Oklahoma and Kansas have improved conditions due to recent rains. It has been hot and dry on the Indian Subcontinent and also in China. China did see some beneficial rains and somewhat cooler temperatures last week. There are ideas that the US is now running short of high-quality cotton to deliver to the exchange and to overseas buyers. Demand remains strong in export markets.
Weekly US Cotton Futures © Jack Scoville
