Cotton future trend hard to predict


Analysts are having a hard time picking the next move for world cotton prices.

ANALYSTS are struggling to make headway on the likely future direction of cotton prices globally, with uncertainty over whether bullish or bearish market factors will prevails.


On one hand, Rabobank pointed out in a recent review of the US Department of Agriculture (USDA) World Agriculture Supply and Demand Estimates (WASDE) report that production was likely to be drastically cut in the US, which is supportive of prices.

Challenging production conditions during the growing season, with a series of hurricanes wreaking havoc on south-eastern states of the US is a key factor in the fall in production.

On the other hand, there is sluggish global demand, with the WASDE report cutting usage due to a combination of slower overall global growth, market currency weakness and simmering world trade tensions, in particular between the US and China, which are major trading partners in the cotton world.

As a result, Rabobank experts have come up with a relatively static pricing forecast, with levels around US82 cents a pound likely for the next three months.

The story Cotton future trend hard to predict first appeared on Farm Online.


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