Cotton futures is having to negotiate a top cotton producer with India – a country surpassing the US and China as they are reporting double-digit acreage reductions for the 2015/16 season. Cotton futures are down 36 points today settling at .6364 cents per pound at the Intercontinental Exchange in New York.
Combined, the USDA says both China and India produce more than one-half of the world’s cotton, but now India’s “cotton climb” since it surpassed the US in cotton production in 2006 is expected to bring forth 26.5% of world supply. China has been the worlds top cotton producer since 1982, with Brazil and Pakistan rounding out the top five.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, had this to say regarding the fundamental assessment of the cotton futures markets, “The ‘landscape’ is changing in the agri-business world with the use of biotechnology and we’re seeing this with cotton too.” Levy adds, “Farmers are proving to make the best of new technology and it appears the Indian farmers are running with it.”
Cotton futures trend is technically down, but more choppy for more than the past four months. I would expect some type of rally in cotton futures soon where short-selling will be least risky.
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