By admin       2018-08-27

It’s not pretty. The cotton market has degenerated to whipsaw activity, triple digits up and then triple digits down – but with an ever so slight downward bias as it sits near a major price support point. The 81-cent support level is close to being challenged as speculators are reluctant to increase their long positions. Additionally, there is a slight tendency of speculators to ease out of their long cotton positions, even as fundamentals favor a move back into the high 80’s. The new trading range, a five-cent spread between 79 and 84 cents, and the bias for lower December prices is being fed by currency difficulties in Turkey and China as well as the trade tensions with those two countries. Who blinks first? Certainly the U.S. is in better position, but the nervous Nellie types are crying to the U.S. government. On the bullish side of the price equation is the widespread and extreme drought in Australia as the southern hemisphere planting season approaches. Also, while continued wet weather is pushing the record Brazilian soybean crop even higher, it is potentially delaying cotton plantings in Brazil. The world’s largest producer, India, has a mixed bag of 100-year flooding in some areas, another pink bollworm infestation and a less-than-adequate monsoon in other areas.

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