Cotton futures is taking a dive today despite the USDA’s official statement of Turkish cotton dropping 17% this season because of low farmer returns. Cotton futures are are down $1.13 today, currently trading at $61.70 per pound today at the Intercontinental Exchange.
The country of Turkey is the worlds second largest cotton buyer (behind China) and the lower production is reportedly going to help boost import demand by 9%, despite slack local consumption. The fall in plantings, described by the USDA Ankara bureau, is due to better perceived returns with corn in traditional cotton growing regions.
“Farmers all over the world will gravitate to the higher paying crops at any given time,” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, sharing her fundamental assessment of the cotton futures market. Taylor added, “Cotton is one of the harder crops – and rightfully more traditionally profitable – but take the monetary incentive away and the next best profitable crop will be grown.”
Cotton futures trend has been yo-yoing up and down, back and forth all year long. Cotton futures is currently down with no bottom yet in sight.
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