Well, the best we can say for cotton with a second higher close is that we seem to be running out of willing sellers after this relentless downtrend. IΆm updating the monthly “data dashboard” from FridayΆs WASDE report in this weekΆs FOCUS for the newsletter. HereΆs a sneak preview of the two “gauges” keeping cotton down and out:

Both the chart above and the chart below make it VERY hard to muster any buying interest in cotton futures. Globally, projected ending stocks are ridiculously large; nearly a yearΆs worth of usage. The only reason futures arenΆt at 60 cents is that about 60% of those global stocks will be sitting in Chinese warehouses; in reserve and “off the market” until/unless they decide/release they simply cannot keep buying up most of their domestic crop for “reserve” by offering farmers about 75% above the world price.

And with the trend in projected stocks up for export competitor countries to boot, the only thing that will light a fire under prices is to set fire to those Chinese warehouses full of cotton! They hang like a wet blanket over the global market because they could shift from “locked up in reserve” to “available to the highest bidder” with the stroke of a pen by the right person in Beijing!

NO CHANGE IN ADVICE. My view is that the worse this market gets from here, the bigger decline weΆll see in cotton acreage in 2014.