I also noted that after many years in this business, it’s often particularly noteworthy to have an “up Friday, up Monday” event where buying sentiment survives a weekend. But I warned yesterday’s trading range and volume were both very low, however, which makes it risky to infer too much into any technical action.
That was key because today was a grim day in futures and it’s hard to say whether it was buying fatigue or just spillover selling from nearly every other pit except wheat.
Plunging oil prices mean cheaper and cheaper synthetic fibers and more competition for cotton. Signs of weak economies in Europe, Japan and China sour the demand outlook to boot. It remains hard to be bullish on cotton until/unless we get indications of a significant acreage drop in 2015, both here and abroad. It’s the only way we can hope the planet will work through an 11-month surplus in ending stocks when just a 3-month stock is considered adequate.