Cotton futures have been “coiling” in price the last couple of weeks even as the Int’l Cotton Advisory Committee (“ICAC”) boosted hopes for the price outlook due to less production. Cotton futures are down $0.03 cents today currently trading at $65.18 per pound at the New York Intercontinental Exchange.
The ICAC determined by the “Cotlook A Index” that global cotton prices for 2016-17 will be boosted by .02 cents a pound to an average .72 cents per pound – compared to last season’s average of .70/lbs. Part of this rise in cotton prices is due to a 5% reduction (year-to-year) in global cotton stocks by 200T tons.
“Much cotton (futures) information to digest as even China is reportedly importing 8% less in the foreseeable future due to their governmental efforts to reduce the inventory of cotton there,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental assessment of the cotton futures market. Craney added, “Imports outside of China are said to increase by 3%, however.”
Cotton futures trend is “up” technically, however, more at a stand still for the past month. A breakout with two consecutive closes above 65.50 could extend the rally, but sustained trading below the 64.50 level could change the trend in this mixed signals cotton futures market.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
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