TuesdayΆs large corn and soybean losses almost surely played a substantial role in the concurrent drop suffered by ICE cotton futures. Traders often assume that events that affect one market will affect another similarly. Still, there were certainly ample reasons for selling the white fiber market. For example, the Monday afternoon Crop Condition report from the USDA indicated that “good” to “excellent” ratings for the domestic crop had improved last week, while the “poor” to “very poor” readings declined.

Some improvement was expected, which probably explains why the reaction was not more severe. I would also point to the latest forecasts, since those imply that much of the country will be blessed with additional rainfall over the next week. The following chart published Monday afternoon makes this point, showing some areas are expected to be inundated with 4-5 inches. Cotton market followers will realize that some areas of the Southeast could actually use some relief from the excess moisture.

However, the rainfall predicted for Texas may be more important. Observe particularly that much of the state is likely to get anywhere from one-half to one inch of rain. And while that obviously is not a great deal, itΆs certainly more than that region has been used to getting for the past 2-3 years.