Cotton futures moved through their second consecutive week of trading in the upper end of their 62-67 cent trading range. The market continues to take its lead from the outside markets, specifically the oilseed and grain complex. With cotton production remaining non competitive with respect to wheat, corn and soybeans, 2008 U.S. cotton plantings will again be sharply lower, falling to between 9.0 and 9.5 million acres.
Thus, at some point during the 2008 crop year, the New York market should move sharply higher. Yet, for now, both U.S. -the worlds leading exporting country-and world cotton stocks remain a burden thwarting any attempt for prices to move above 67-69 cents. Any significant rally in the cotton market must continue to wait until the planting or immediate post planting season of the Northern Hemisphere crop. The current trading range should be expected to hold through the expiry of the March futures contract.
Export sales for the week ending December 13 were a reflection of the higher prices during that week. Net sales totaled 158,300 RB with Upland sales a very poor 133,700 RB while Pima sales were a very respectable 24,600 RB. Primary buyers of Upland were Pakistan (30,390 RB); Indonesia and Turkey.
Primary buyers of Pima were Pakistan (10,600 RB); India and Turkey. Export shipments were also abnormally low at 170,500 RB and were comprised of 150,200 RB of Upland and 20,300 RB of Pima. Primary destinations of Upland were China (40,400); Turkey and Mexico. Primary destinations of Pima were India (7,700 RB), Pakistan and China.
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