It’s Thursday and time for the week in review: A strong dollar and ideas that 2015 global cotton acreage may not drop as much as previously expected (and global consumption declining more than expected) have turned psychology in cotton negative again.
Weak stock market quotes feed the pessimism because stock price direction has been adopted by cotton traders as a proxy for consumer attitudes and consumer attitudes a proxy for demand of all things bearing cotton.
Fund buying that powered the February rally has suddenly dried up. New crop futures never ventured very much above the 65.90 that triggered new crop sales.
Even though export shipments reported last week hit another marketing year high, up 87% from the week before and 37% higher than the 4-week average, new weekly sales reported Thursday were down and perhaps that’s why suddenly traders are ignoring the fact that even after USDA hiked estimated cotton exports to 10.7 million bales just last month, sales YTD are STILL running 100,000 bales ahead of where they need to be to sustain that forecast.