Cotton futures continue their slow but steady ascent in both old and new crop. Taking out what little chance there was for rain in Texas cotton country contributed to buying in both old and new crop.
While it’s certainly no “runaway” bull market, it’s a persistant one in the face of very bearish global fundamentals so long as you count China’s mountain of reserve cotton and assume it’s not only in salable condition, but that China is now eager to whittle down the mountain by curbing imports.
Repeating from yesterday, China’s cotton acreage is a significant wildcard. Market bulls say it could drop 22% while market bears doubt the drop will be much over 10% and totally negated by greater availability of reserve stocks totaling more than 18 mos. domestic usage for cotton.
NASS put out weekly crop progress reports yesterday afternoon. Cotton planting has hit 9%, down from the 5-year average of 12% and 1 pt. behind a year ago at 9%. There’s a lot of variation among key states, however. Louisiana is only 1% planted vs. 17% on average, while California is 90% planted vs. 45% on average and AZ is 55% planted vs. 42% on average.