Cotton Analysis: Look at Q2 Time Frame

Looking Forward to 2020 123019

The cotton market is trading in the green during Monday’s trading session. That’s on top of cotton futures ending last week near the $70 mark. The Adjusted World Price (AWP) also climbed to 58 cents. It’s now at its highest point since early July.

USDA printing in its Supply and Demand Report a pullback to cotton expectations in 2019. Some analysts say it’s a ‘gift’ from the trade perspective.

“We’ve had three straight reports now where you see a reduction,” said John Payne of Daniels Trading. “We’ve slowly chopped away at that big supply story and all the while, the China trade talks have gone well.”

Payne says Texas A&M projected last week the cotton acreage will shrink 11 million acres. He believes that is a recipe for a real spike this summer.

Payne is looking at that April timeframe for prices to peak.