No clear direction on the cotton market

The cotton price has been fluctuating within a sideways trend in recent weeks. The most-active contract (due in December) is currently priced at a good 64 US cents per pound. 

The cotton market appears to be lacking any clear sense of direction at present. As with grains and oilseeds, the information about cotton contained in the acreage report due to be published next Tuesday by the US Department of Agriculture (USDA) is eagerly awaited. 

According to the USDA, US farmers had planned in the spring to sow 9.55 million acres of cotton. There are now increasing signs that this target may not be achieved. This is based on applications for agricultural insurance, the deadlines for which have already passed. If it is confirmed that the US cotton acreage was reduced more sharply than expected, this would doubtless give a boost to the cotton price, according to Commerzbank. That said, the weather in key growing states like Texas has now calmed down following heavy rain and storms, so it is still possible that the planned acreage will be planted after all. 

The latest Chinese import figures are also doing little to help the price: China's cotton imports may have been "only" 15% down year-on-year in May - which is a smaller decrease than in the preceding months - but nonetheless plunged by 34% year-on-year from January to May, adds Commmerzbank.