Nearby March futures made it a see-saw ride last week and we begin this week on a down note. After hitting the 74 cent level on Monday, prices moved sluggishly during the Holiday-shortened week but were then aided by a good export report on Friday.
Today’s USDA crop production and supply/demand estimates were not what was expected. The market moved down for the day but, frankly, we can take relief that price did not decline even more than it did.
The trend to even higher prices may not be over, but it has hit a snag-as expected. After closing at over 72 cents earlier on Monday this week, December futures has now declined 3consecutive days. Dec. closed below 70 cents today for the first time since October 16-in almost 2 weeks.
October 16, 2020
Cotton is pushing 70 cents, presenting pricing and risk management opportunities for growers that I’m sure most of us never thought we would see for this crop. It’s decision time. If not priced already, this move certainly seems a good opportunity to get going or add to previous sales.
Dec. futures mad a good run at 67 cents a couple of weeks ago. Since that time, prices retreated to and bounced off the 65-cent area and now moving back to near 66.
The 65 to 67 cents area seems to be firming up.
Don’s latest comments. Take note of the comments on the forced labor legislation. I have heard the same comments around concerns of how this will impact China/US relations in general and Us Agriculture specifically from Top Third marketing. They also expressed concern that the dollar has strengthened a little which is also potentially providing headwind.
In the most recent previous version of Cotton Comments, I said that cotton price (Dec futures) on September 1 had closed above 66 cents. The close that day was not above 66. I failed to recognize that the particular data and charting source I was using that day was not updating properly. Lesson learned—from now on I will check using more than one source. I apologize. Don Shurley