Cotton futures traders have more data to work with as domestic sowings are reportedly rebounding from 22-year lows as farmers shift away from grains. Cotton futures are down 65 points today currently trading at .5895 per pound at the New York Intercontinental Exchange.
The shift from grains to cotton some industry experts believe will not be significant as only the plantings are set to increase by 6.2% from the 2015 harvest. Most of the extra cotton plants are said be to in Texas – the largest US cotton growing state – with saturated fields that are ready for sowing following flooding last year.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view of the cotton futures market by stating, “Farmers are seeking the very best value for their acreage, time, and effort and cotton appears to have prime fields awaking sowings in Texas.” Plotkin added, “Cotton value has held up better than other grains compared to price levels only one year ago so the economics make sense to the farmer.”
The trend for cotton futures is down with no bottom yet in sight. Major support for cotton futures should be coming in soon, however, near the .58 cent level which is last year’s low near the end of January 2015.
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