By admin       2018-08-27

December, March and May futures are all very near the same price. The spread between December and July futures is little more than a hundred points. This means there is no incentive for merchants/cooperatives to hold cotton. The risk is far too great. Specifically, it dictates that they sell at very, very competitive rates in the world market—to sell as quickly as possible, thereby, offering very favorable basis terms to mills…to get as much cotton as possible committed to mills. All of that simply means that merchants/cooperatives must sell at whatever price they can to just break even…to find a selling price as low as possible. That’s a bullish factor as favorably priced U.S. export sales will continue to capture market share.

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