By admin       2018-05-28

Cotton bulls are roaming the globe as Chinese, Indian and U.S. cotton stocks continue to decline. With stocks falling in the 3 major producing countries, world stocks are working their way down to 87 million bales, some 1.2 million below the current USDA estimate. Too, with the USDA world stocks estimate some 7 million bales overstated, prices were initially slow to move higher until the past month when virtually every analyst and the principal cotton agencies in other world producing countries began to challenge the USDA estimates. Most calculate the USDA estimate is about 7 million bales or more too high. Most feel that USDA has errors in its China and India databases. As commented last week the market’s bullishness is thought to be based on the fact that world stocks are well less than that estimated by USDA. Additionally, production difficulties, particularly in the U.S. and China are in the headlines. This energized the massive Chinese speculative funds and drove the market to new highs. Yet, as most of the world’s high grades are already committed, and the once thought to be excess supply of low grades are rapidly disappearing at truly “cheap” prices, the shortage in world stocks is only further fueling the Chinese speculative interest. The old crop July has crossed the 89 cent barrier and still has an eye on 90 cents. Too, the new crop December has been very persistent in inching its way to 90 cents as we suggested 6 weeks ago. However, the very mention of 90 cents demands the notation that growers should be well on their way to fixing the price on as much as 50% of their expected 2018 crop production. Prices are now in the upper 10% of the historical price range and grower fixations are essential.

Download App

# #

Member Login