Cotton futures have been in a sideways pattern for some time, ranging from 77.00 to 88.00. However, prices have stabilized more since taking a dive at the end of 2022. Tight U.S. ending stocks support the cotton market, with USDA lowering yields from 7.44 million acres to 7.31.
Additionally, a considerable reduction in planted acres compared to last year and continued estimates for strong demand are encouraging prices, but not as much as one would think. The cotton market remains stuck in a sideways pattern. Questions about the future of global cotton demand are emerging in light of inflation, high-interest rates, consumer demand, recession talk and slow Chinese economic growth.
But for those looking to the future, every storied cotton farmer knows the more extended futures remain in a sideways pattern. The bigger the price breakout will be down the road.
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