The marketing plan of most was once higher priced contracts were filled, they would capture a strong basis on their overages and price similarly. With that mind, as mentioned last week, a range bound market can be expected at least through harvest. Not that specs cannot go lower but having little left to liquidate and the trade certainly not encouraged to short the market at these levels, selling pressure should subside.Įven still, with demand falling to the lows of early 2020 and further cuts expected any significant improvement in price will meet stiff resistance. Through last Tuesday, specs had reduced their net long position to mere 2.6 million bales, the weakest it has been since August 2020. In other words, keenly aware of this negativity for weeks the market is already trading it. Where to from here? Cotton prices holding steady amidst all this bearish news is akin to saying you can’t get blood out of a turnip. The fact additional irrigated and dryland acreage in the Southwest is being abandoned daily makes it less likely. Although, with record setting yields being achieved in many parts of the Southeast and Midsouth it may appear doable. production left unchanged at 13.8 million bales is still questionable. Last week shipments of 168,820 bales must increase significantly to support futures price. Shipment volume is a number to watch carefully over the next couple of months as current crop becomes more readily available for transport. Reflective of this were last week’s export sales.Ĭurrent crop sales of 144,280 bales though up sixteen percent from the previous week were nowhere near where you would expect given such cheap prices. In turn, with global production reduced only slightly, world ending stocks increased 3.1 million bales to 87.9 million, the second highest level in the past five seasons. Not surprisingly, USDA in their October WASDE report, lowered world mill use by three million bales to 115.6 million. This leaves little doubt the Fed will remain hawkish raising interest rates once again in November.įundamentally, the news was just as bearish. This is of interest because inflated service prices are much harder to tame than that of goods which remained unchanged. Fueling this increase was the price of services, such as healthcare, housing, education, auto repair and others. The core CPI, consumer prices excluding food and energy, experienced its biggest jump in forty years rising 6.6 percent in September. ![]() ![]() Inflationary pressures show little signs of letting up. The faltering macroeconomy continues to hang over this market like an anvil.
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