Cotton futures have blasted-off these past three trading sessions on the outlook of cotton planting being behind schedule. Cotton futures are up 125 points to .6659 (a pound) at this time of writing on the InterContinental Exchange – its highest prices since September.
Of the 15 cotton producing states from last year, only “three” are reporting any planting representing 2% of cotton planted as of yet when the five-year average at this time should be 6%. California’s planting lag is the most significant with only 10% planted for the state when 28% was planted this time last year, but then again Texas is only at “1%” planted when 9% was in last April. It’s safe to say the water limitations may be to blame in both those state’s case.
“Where water flows, crops grow,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her fundamental analysis regarding the current cotton futures situation. Levy added, “If water can’t be dedicated to the crop, then cotton futures may be only in the beginning stages of its uptrend.”
The trend for cotton futures is up as of today. I will be looking for some type of pull-back in cotton futures to get on-board this market.
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