NY Cotton Futures further drop by 280 points last week – ChinaTexnet.com
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NY Cotton Futures further drop by 280 points last week

2014-07-07 09:08:46 ECOMUSA
NY cotton futures declined further this week, dropping a total of 280 points for the week ending July 3rd. ICE futures US will be closed tomorrow as we celebrate the Independence Day. 
We’re trading at a 19 month low on expectation of a larger US crop and a weaker demand from abroad. On Monday the USDA survey said that the US cotton growers likely planted 11.4 million acres this season, about 10% increase over last spring and about 3% higher than market expectation. 
Net sales for the past week were 35k running bales for the current crop and 60k bales for the 14/15 crop, as mills only buy hand to mouth with a declining market. DJI breaks 17k! Ever since last year we have started to see the equity markets less defensive and starting to drift higher.
This has spread globally as the Asian and European markets are sharing this reduced level of fear about the future. Equity markets love inflation and despite a U.S. index that boasts only 2%, the food and energy prices vs 10 years ago maybe closer to 20-30% higher. However, it feels like the commodity prices have reached levels that will find a lot of resistance going higher and are starting to build trading ranges. 
Cotton is carving out a range in the 70-90 cent area that should hold up unless we see some unexpected events in China or India. This confidence that commodity prices are finally range bound is the main reason equity markets are making new highs. However, the underlying weakness and lack of demand will have growth very weak globally for many years. Equity markets will also find trading ranges as we creep along during this long recovery process.