Cotton futures have plummeted to two week lows and are more than 350 points from their early month highs despite USDA reports of cotton planting behind their five-year average. Cotton futures fell another 75 points today to $0.6464 cents per pound at the New York division of the Intercontinental Exchange.
There are 15 states where 99% of the 2014 cotton crop was planted and some states such as Arizona, Arkansas, and Mississippi are well above the five-year average for plantings. Even when these states are averaged with the other 12 states, the five-year average of 32% of the cotton crop planted is only sitting at “26%” as of May 10th reporting.
“The cotton (futures) market has been up and down like a yo-yo since January,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, regarding the fundamental assessment of the cotton futures market. Evans added, “If the significant lagging in planting can’t turn this market around, supply may very well be the underlying concerning issue.”
Despite the recent drop in cotton futures this month, the trend remains up in my study. I would think support for cotton futures should be near-by.
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