- Corn has started the battle for acres next season.
- The opponents are soybeans and cotton.
- Corn will need increased acres and increased yields to rebuild tight supply.
Cotton: Bullish news:U.S. cotton supplies are on target to reach historic low levels. The record high price of $1.17 is in jeopardy. One dollar resistance in the cotton markets was broken this week. Farmers are selling cotton at prices in excess of 90 cents. Farmers are more presold than normal as prices passed a 15 year high.
Fabric demand in Asia is increasing. Asian economies are recovering rapidly despite the sluggish U.S. economy. Chinese imports are up 119 percent. Brazil dropped their import tariff on 1.1 million bales of U.S. cotton. Export sales exceed expectations near 547,000 bales.
Next year’s cotton crop could be smaller. Corn and Soybean prices are very competitive for acres. The market fears reduced supply. Cotton prices must increase to attract more acres.
Bearish news:Profit taking has commenced as the month and the quarter come to an end. Trader open interest is above 73,500 buy contracts is near a record and subject to profit taking
Harvest is 13 percent complete and 67 percent of cotton bolls are open.