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Cotton Futures and Options Weekly Blog
 

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Cotton futures and options quick facts:

  • 50,000 pound contract

  • One cent move equals $500

  • Trades March, May, July, October, December

 

2/3/12 Cotton futures prices traded mostly sideways this week as the U.S. dollar is continuing its slide. The USD is now down 3 full basis points over the last few weeks which is helping to push many commodity markets higher. Friday's strong jobs report is also helping commodity prices strengthen. It also seems that bad European Union headlines are having less affect on the markets and the worst case may already be factored into many of these markets.

1/27/12 Cotton futures prices are trading mostly higher again this week. The bullish news was the weakening U.S. dollar that continues its 2 week slide of about 3 full basis points which helps push dollar denominated commodity markets higher. The FOMC meeting left rates unchanged and opened the door for more quantitative easing by the Federal Reserve Bank. European sovereign debt issues and saber rattling from Iran seemed to have little affect on the markets.

1/20/12 Cotton futures prices traded mostly higher this week as the recent influx of capital from hedge funds and other large speculators into the commodity markets and especially the soft sector pushed many commodity markets higher. The recent successful debt auctions from Spain and France helped stabilize the European Union for the near term and in turn weaken the U.S. dollar.

1/6/12 Cotton futures prices traded mostly sideways to down this week. The U.S. dollar rose to new contract highs as concerns over European banks pushed the Eurocurrency down to a 16 month low. New tensions with Iran and its nuclear program has pushed American and British aircraft carriers to enter the Persian Gulf and the Straits of Hormuz and in turn pushed crude oil prices to the highs.

12/23/11 Cotton futures prices traded mostly sideways this week while many other commodity markets rallied as the U.S. dollar sold off from its contract highs in the thin volume holiday trade that is typical for this week and next. Iran tensions pushed oil higher and positive economic reports out of the U.S. and Europe also pushed investors back into risk assets like stocks and commodities.

12/16/11 Cotton futures prices sold off this week along with most other commodity markets. The lack of an additional quantitative easing announcement by Bernanke and the Federal Reserve Bank at the FOMC meeting surprised some market participants and pressured the markets. More bad news out of Europe and very positive news from the U.S. economy pushed more assets in to the U.S. dollar as it hit another high kept the stock markets trading down to sideways as well.

12/9/11 Cotton futures prices traded mostly down this week again as most of the commodity and stock markets took their directional cues from the European headlines again. In other words, bad news out of the European Union pressured the markets and good news helped push markets higher. The week ended on a positive note as the European Union summit yielded ideas of tightening anti-deficit rules and punishments for member countries. This heartened the markets as it symbolized the idea that forced accountability of member nations may curb government spending.

12/2/11 Cotton futures prices traded sideways this week along as many other commodity markets rallied. Crude oil broke through $100 a barrel as Iranian students broke into the United Kingdon embassy in Tehran. Positive job growth in the U.S. and other encouraging economic data helped many commodities push higher. Also adding to the bullish tone was stability in Europe as a concerted effort by 5 central banks to add liquidity to Europe eased some fears and a sell off in the U.S. dollar also helped commodity prices.

11/25/11 Cotton futures prices traded mostly down along with the majority of the commodity markets. The U.S. dollar index rallied almost to its October 4th high which is coincidentally when many commodity markets' made their recent contract lows. The recent German bond auction was a failure and couldn't managed to sell all of the bonds issued as more problems out of Italy and Greece hurt the European Union as investors flee to cash and the U.S. treasury markets.

11/18/11 Cotton futures prices traded mostly sideways as more problems came out of the European Union suppressing most commodity rally attempts. The talk of Italy potentially defaulting on its debt and Italian bond yields breaching the critical 7% area hindered most bullish support for most markets. The European Central Bank chose to purchase Italian and Spanish bonds to support the markets and prove that they would support the teetering European Union and its weak links from default.

11/4/11 Cotton futures prices traded mostly sideways to down this week as more uncertainty about Greek and Italian solvency added to European Union woes. Also adding to the uncertainty was the bankruptcy declaration by MF Global who supposedly was overleveraged in European high risk assets and it was a very bad bet. This uncertainty pushed assets towards the U.S. dollar and U.S. treasuries pushing both higher on the week. The strong dollar often depresses dollar denominated assets like commodities.

10/14/11 Cotton futures prices continue to trade sideways again this week in spite of the positive rhetoric out of the European Union and the idea that the EU has plenty of assets to back up its support of failing economys like Greece, Spain and Italy has led investors back into stocks and commodities. The U.S. dollar continues its fall which is also helping out the dollar demoninated commodity markets become more bullish.

10/7/11 Cotton futures prices are trading sideways this week near its lows. The market moving news of the week was Moodys' cutting the senior debt and deposit ratings of 12 UK financial institutions while at the same time the European Commission put together a possible coordinated European bank recapitalization plan to stabilize weak links in the financial chain like Greece and Italy. Market volatility continues to be extreme in stock and commodity futures contracts.

9/30/11 Cotton futures prices are trading mostly sideways to down this week along with most other commodity markets as more problems with Greece and its potential default to its bond holders and other European woes has led to an extremely volatile trading environment for stocks and commodity investors. The U.S. dollar is also near its recent highs which is also hindering the bulls for now.

9/23/11 Cotton futures prices sold off this week along with just about every other commodity as more problems out of the European Union and Federal Reserve Bank chairman Ben Bernanke saying that the U.S. economy was probably going to slip back into a recession. This fear of a double dip global recession sent investors fleeing out of the stock and commodity markets around the globe and strengthened the U.S. dollar significantly.

9/16/11 Cotton futures prices traded mostly sideways to down this week along with most other commodity contracts as more European soveriegn debt problems (Greece) and more bad economic reports out of the United States have come together to add more uncertainty about the world's economic future. The weakening U.S. dollar did little to prop up commodity prices. Volatility can be extreme at times as the market reacts to economic reports.

9/1/11 Cotton futures prices are trading sideways this week in spite of the strengthening U.S. dollar and the idea that the Federal Reserve Bank is thinking about another round of quantitative easing to stimulate the economy as interest rates should remain low until 2013 if not longer.

8/19/11 Cotton futures prices had an extremely volatile week along with most of the rest of the commodity markets. The stock market indices were quite volatile and affected most other asset classes as European Union problems resurfaced again and put many investors in doubt about future U.S. and global growth prospects over the near term.

8/5/11 Cotton futures prices have been mostly sideways this week. This week's main stories are about Europe's continued problems and the foreseeable end of the European Union as the PIIGS continue to harm. A slower global economy and the 10% correction in the U.S. stock markets have many commodity investors heading for the sidelines.

7/29/11 Cotton futures prices have been trading mostly sideways this week as the United States faces a political impasse on raising the debt ceiling. This has led to talk about the U.S. losing its AAA credit rating and potentially defaulting on its debt obligations. The U.S. dollar is trading sideways near its lows probably because things seem to be even worse in Europe. Many of the other commodity markets have also been trading sideways for the most part.

7/15/11 Cotton futures prices sold off by about 15 cents per pound this week as Ben Bernanke left the door open for QE3 or printing more U.S. dollars to be used for buying treasuries to help buoy the economy. Also the European Bank Authority said 8 out of 90 banks failed their stress tests this week. 5 were from Spain, 2 from Greece and one from Austria. The U.S. dollar sold off this week.

7/1/11 Cotton futures prices sold off by about 5 cents per pound this week is spite of the fact that the U.S. dollar lost about 2 basis points once the markets decided that the greek soveriegn debt issues would be resolved for the short term in spite of the agreement that most analyst share that Greece is doomed to be bankrupt sooner or later. Many commodity sectors look to be selling off such as the precious metals, energies and grains seem to be trending sideways to down over the near term.

6/24/11 Cotton futures prices are trading mostly higher by about 15 cents per pound this week in spite of the collapse in crude oil prices. The Obama administration decided to release 30 million barrels of oil from the strategic petroleum reserve to help pressure energy prices. The International Energy Agency plans to add 2 million barrels a day from non-OPEC reserves. Also pressuring the markets is the idea that Greece will default sooner or later and may be released from the European Union in order to strengthen the Euro. Reports of slower growth out of India and China is also pressuring commodity prices in general.

6/10/11 Cotton futures prices are trading mostly down this week to the tune of about 10 cents per pound. Cotton is trading in a sideways to down pattern currently and volatility has been coming down which makes option premiums shrink as well.

6/3/11 Cotton futures prices rallied this week in spite of quite a bit of bad U.S. economic data in manufacturing, housing and jobs has consumer confidence falling along with the stock market and most of the commodity markets. Many economists fear a soft patch in the economy this summer and a slowing of Asian demand for many commodities as attempts to battle inflation by raising rates are slowing growth.

5/27/11 Cotton futures prices are trading sideways along with most of the other commodity markets as large speculators such as hedge funds seem to be exiting the riskier assets. The lack of aggressive buying and selling of these futures contracts has caused many of them to trade sideways in small trading ranges. The recent 3 cent rally in the US dollar should have been more of a catalyst pushing commodity prices higher but this has largely been ignored. This is most likely caused by the perception that China's economy may be slowing down as well.

5/20/11 Cotton futures prices are trading sideways this week as the US dollar continues to strengthen and investors seem to be heading for the exit when it comes to their riskier assets and are getting in to cash and cash equivalents. The volatility in many markets has dropped considerably as some like silver, gold, crude oil and cotton are consolidating sideways. This in turn is bringing option premiums back down to more normal levels for some markets as this volatility premium is taken out of the options.

5/13/11 Cotton futures prices sold off again this week as the market digests the idea that Greece may default on its debt just a year after this same predicament that forced Germany to infuse money into the system. This news crushed the Euro Currency and pushed the US dollar higher which in turn hurt most commodity prices and pushed volatility much higher. Quantitative easing is set to end this summer which might be why the stock market is soft in spite of energy prices coming down violently. Option premiums are very high for most commodities because of the recent volatility.

5/6/11 Cotton futures prices sold off this week along with most of the other commodity markets. A cocktail of bearish happenings have been a catalyst initiating a huge exodus out of risk assets to reduce investors' risk exposure. The ECB president Trichet let the market know that a ECB rate hike is not a done deal in July which in turn pushed the US dollar up a full basis point. Also hitting the markets were the CME group's increase in silver margin requirements which totalled 5 increases over the last 2 weeks which pushed weak longs out of the market and caused silver to correct by about 25% making it the worst sell off since the early 1980's. Lastly, many US economic reports have been weaker than expected which is weakening the confidence of a strong economic recovery in the US over the near term.

4/29/11 Cotton futures prices lost about 10 cents per pound this week. The FOMC meeting left Bernanke signalling that QE 3 would not happen and QE 2 would end in June and that interest rates will probably stay on hold for a while leaving the US dollar to get crushed as other countries plan on continued interest rates hikes to fight inflation and attract foreign assets to the stronger currencies.

4/22/11 Cotton futures prices sold off this week by about 10 cents a pound as most of the other commodities rallied as the US dollar hit levels not seen since the "Great Recession" summer of 2008. The market seems to be factoring in an unwillingness by the United States' federal reserve bank to raise interest rates in spite of the fact that many other economies like Australia, China and the European Union are raising interest rates. This rising interest rate environment draws money away from US investments into stronger currency assets.

4/8/11 Cotton futures prices rallied about 20 cents per pund this week along with many other commodity markets as the bulls seem to have control for now. Gold hit an all time high and crude oil broke through $110 a barrel pulling other commodities with them. The US dollar coincidentally hit new contract lows this week as well. The new earthquake in Japan seems to be a non-event this time for the markets.

4/1/11 Cotton futures prices have been trading sideways around $1.97 level along with the rest of the soft markets. The softs had been the stand out sector recently with many hitting record highs along with cotton. Cotton option premiums are high.

3/25/11 Cotton futures prices were mostly higher this week based on the fact that the risk trades like commodities were the weekly theme. The Japan nuclear scare seems to have been averted for the most part and the markets factored in a worst case scenario which caused the massive sell off last week. The tensions in the Middle East seem to be growing which pushed crude oil prices over the $105 level. The US dollar has been sliding for most of the month of March which is also helping push most commodity futures prices higher. The March 31st prospective plantings report might be a big market mover is cotton acreage slips.

3/18/11 Cotton futures prices came down this week along with most of the commodity and stock markets as investors try to figure out what affects the tsunami and its destruction of the cities and nuclear plants in Japan will have over the short, medium and long terms. Japan's economy is the 3rd largest in the world and demand destruction for some commodities may occur.

3/11/11 Cotton futures prices are coming down this week after a volatile few weeks in the commodity markets. Geopolitical issues in the Middle East put the bias in the commodity markets in the hands of the bulls for the last few weeks but the buy the rumor sell the fact side of the equation and China's first trade deficit in many years seems to be behind the massive liquidation of most of the commodity markets. An aggressive increase in planted acres around the globe will possilbly lead to production outpacing consumption which should also pressure prices.

3/4/11 Cotton futures prices rallied again this week by about 20 cents per pound as the world wonders about the violence and ubiquitous unrest in northern Africa and the middle east. Egyptians got rid of their despot. Libya is trying along with Bahrain, Tunisia and others which is pushing crude oil prices sky high again. Higher oil prices are very inflationary and helps push the bias of all dollar denominated commodities higher.

2/11/11 Cotton futures prices continue to rally with most of the soft markets this week. The uprising in Egypt by the people to oust the long time president out of power has turned violent and caused many commodity markets to become very volatile because of the belief that turmoil may spread to other Muslim countries near Egypt. On February 10th the ousted president appointed his vice president as ruler much to the dismay of the protesters.

2/4/11 Cotton futures prices rallied this week as worry about the Egyptian uprising spreading to other Muslim countries had the markets on edge. In spite of the Suez canal being only responsible for about 3% of the oil shipping, the oil markets rallied and pulled many other markets higher as well. The idea that inflation and especially food and energy inflation is starting to get traction in the media and may have a significant impact of the economy soon.

1/28/11 Cotton futures prices hit another high this week as global supplies do not seem sufficient enough to meet demand. These record high prices have begun to slow demand in some areas but the petroleum based alternatives such as nylon, rayon and polyester are still expensive because of crude oil prices being in the $80s.

1/21/11 Cotton futures prices bucked the trend of most of the other commodity markets as they sold off violently in anticipation that China will step up its efforts to quell inflation by making it harder to get money out of its main banks by increasing reserve requirements and raising interest rates.

1/7/11 Cotton futures prices are still near the upper end of its recent record setting range in spite of the recent strength in the US dollar and the idea that China, the top importer of cotton, is expected to decrease imports by 28% in 2011. Most of the other commodities have been coming down to start the new year.

12/24/10 Cotton futures prices came down this week. The week before and after Christmas are notoriously thinly traded and the markets can have very volatile price swings because of the lack of trading volume. Many money managers call it quits for the year in early December to lock in before year end.

12/17/10 Cotton futures prices rallied near the highs again this week as India restricts exports to make sure the is enough supply for its domestic needs. This rally is occurring in spite of the fact that the US cotton crop is looking near perfect in most parts of the country.

12/3/10 Cotton futures prices have been running up and down violently this week as the European Union has decided to give Ireland the loan it needs so that it won't have to default on its debt. Also helping the market is the idea that the worst of the problems in the United States are in the past and its economy will likely begin to grow at a better pace than expected. There is also the idea that capital gains taxes and taxes on dividends will not be implemented now that republicans are in charge.

11/19/10 Cotton futures prices sold off again this week as China raised interest rates in an attempt to slow its overheating economy and inflation. Also pressuring the commodity markets was the idea that Ireland may default on loans might lead to more Eurozone economic problems coming soon.

11/12/10 Cotton futures prices are correcting significantly after the huge run up in prices. The most prevelant perception is that the global recovery may be stalling based on worse than expected economic reports as of late and the idea that China will hike interest rates to battle inflation which should push commodities lower.

11/5/10 Cotton futures prices are still heading higher as the FOMC meeting yielded more quantitative easing by the Fed. Printing more money should lead to high inflation or hyperinflation for the next few years. Especially when you consider the fact that the Fed bought so much of the toxic real estate assets from Freddie Mac and Fannie Mae. It makes sense that they won't raise rates to fight inflation because it would cost the government billions of dollars.

10/22/10 Cotton futures prices hit all time highs this week in spite of the rally in the US Dollar and corresponding commodity sell off. Strong exports especially from China are still lifting the market.

10/15/10 Cotton futures prices hit new highs not seen since the Civil War. The week US Dollar is helping  US farmers move their cotton and other agricultural products because of the cheaper prices for foreign buyers. Cotton options volatility premiums are high.

10/8/10 Cotton futures prices hit new highs to levels not seen since 1995 due to record exports of US cotton. The recent USDA report showed cotton production up to 18.9 million bales which is up 55% form last year's 12.2 million bales estimate. The weakening US Dollar is helping many US agricultural products fetch higher prices.

9/24/10 Cotton futures prices are coming down a bit this week and may have gotten ahead of themselves. Weather problems around the world might make it hard to come up with the 120 million bales overall demand estimates this year.

9/1710 Cotton futures prices hit a new 26 month high as cotton yields in the US are suspected to be poor and commodity funds have been huge buyers of soft commodity contracts like cotton, sugar and coffee recently. Cotton options have very high premiums right now.

9/10/10 Cotton futures prices continue to climb to contract highs and multi year highs helped by recent commodity fund buying of the food and fiber sectors in an attempt to diversify away from equities using non-correlated commodities. Many other commodities like energies and grains have recently had a high correlation to stocks.

8/20/10 Cotton futures prices are still near contract highs this week as the hot dry weather in the delta region of the U.S. persists. Also helping prices is the fact that importers continue to buy cotton even at these extremely high price levels. Cotton harvest does not begin until October so tight supplies will continue until then.

8/13/10 Cotton futures prices are near contract highs this week as the extremely hot dry weather in the delta region may hurt cotton yields significantly. Strong US exports are also helping cotton prices along with a few upbeat economic reports around the globe.

8/6/10 Cotton futures prices rallied towards its highs as the US Dollar continues to weaken which may increase demand for US cotton. The current supplies for cotton are tight and the new harvest is still a couple of months away.

8/2/10 Cotton futures prices rallied again in spite of an improving crop rating by the USDA and the fact that almost 11 million acres where planted this growing season by farmers in the United States and weather conditions are practically ideal.

7/24/10 Cotton futures prices rallied this week almost two cents as the US Dollar continues to weaken and the Asian economies seem to be growing. Cotton option premiums are high.

7/10/10 Cotton futures prices sold off this week to a 4 month low. The USDA supply and demand report showed US ending stocks up from 2.80 to 3.50 million bales. World ending stocks came in higher from 49.6 to 49.9 million bales. The exports for 2009-10 are 15% below from a year ago levels.

7/2/10 Cotton futures prices sold off this week after the USDA planted acreage report came in bearish for cotton. The estimate of 10.91 million acreas was up 19% from a year ago which is much more than most traders expected. The recent sell off in the US Dollar is not holding cotton prices up.

6/24/10 Cotton futures prices rallied again this week along with many of the other commodity markets as the US Dollar has been selling off after making its high above 89 at the beginning of June. The new crop supplies are still a few months away from hitting the market.

6/11/10 Cotton futures prices rallied this week as hot temperatures in Texas may hurt yields. The recent USDA report showed US ending stocks come down from 3.0 to 2.8 million bales and world ending stocks come down from 50.1 to 49.6 million bales. The stocks to usage ratio is now 17% which is the lowest in 15 years.

6/4/10 Cotton futures prices sold off this week for the 5th day in a row. The expectations of a larger US crop, the rising US Dollar and concerns about lower world demand are pressuring prices again.

5/28/10 Cotton futures prices sold off this week as the lack of any problems and weak demand battle with tight supplies in the US until harvest. The strengthening US Dollar is also hurting exports.

5/21/10 Cotton futures prices came down with the rest of the commodity markets this week as the European problems stemming from Greece and the other PIIGS are expected to hurt demand for many commodities. Investors seem to be choosing cash over stocks and commodities for now. Tight supplies this summer are helping firm prices some.

5/14/10 Cotton futures prices are trading sideways this week. The recent USDA supply and demand report showed US ending stocks at 3 million bales down from 3.1 million bales. The world ending stocks showed 50 million bales down from 53 million bales.

5/7/10 Cotton futures prices sold off this week as the Greece problems are decreasing investors' risk appetite and pushing assets into the US Dollar and US Treasuries. China is expecting tight supplies for cotton this year. 

4/25/10 Cotton futures prices rallied this week as news from around the globe has been getting better including the United States. The recent strength in the US Dollar does not seem to be affecting the cotton market for now.

4/16/10 Cotton futures prices traded mostly sideways this week as the US Dollar started to come down a bit and the news that the SEC charged Goldman Sachs with fraud pressured many stock and commodity markets.

4/9/10 Cotton futures prices sold off this week in spite of the idea that many economies around the world are gaining strength and the FOMC minutes spoke of keeping rates low for a while. Cotton option premiums are high.

3/27/10 Cotton futures prices sold off this week as the strong US Dollar and the idea that this months planting intentions report will show lots more cotton acres helped push the market down this week.

2/26/10 Cotton futures prices rallied again this week in spite of the stronger US Dollar and weak economic reports. The market is factoring in tight supplies until this fall's harvest and the idea that wet conditions in the south east of the US will see continued wet conditions that will delay spring plantings. Cotton options premiums are high.

2/12/10 Cotton futures prices rallied this week as the USDA report showed a decrease in US ending stocks from 4.3 to 3.3 million bales and world ending stocks increased from 51.7 to 52.1 million bales. The idea that Europe will help Greece with its financial problems is lending strength to most of the commodity markets including cotton.

2/5/10 Cotton futures prices came down again this week with most of the other commodity markets as the strength in the US Dollar is expected to diminish demand and the recent attempts by China to tighten its monetary system is also hurting prices.

1/30/10 Cotton futures prices came down this week again as the US Dollar remains strong and the disruptive harvest weather a few months ago doesn't seemed to have been too much of a factor for less yields. Cotton option premiums are high.

1/22/10 Cotton futures prices came down again this week along with the rest of the commodity markets as the strong US Dollar and the idea that China is restraining its economy by raising rates and increasing the minimum reserve requirements that banks must keep will diminish demand.

1/15/10 Cotton futures prices came down this week as the USDA supply and demand report showed US ending stocks come down from 4.50 million bales to 4.30 million bales. Cotton prices sold off to an 8 week low based on the news and strength in the US Dollar.

1/8/10 Cotton futures prices sold off this week as the International Cotton Advisory Committee predicted that world cotton production would be 24.1 million tons for 2010-11 which is up 8% from this season's production.

1/1/10 Cotton futures prices rose to the yearly highs this week as the crop expectation coupled with demand show a tight supply situation for the coming year. The recent strength in the US Dollar could not slow the rally in cotton. Cotton options premiums are high.

12/11/09 Cotton futures prices rose 5 cents this week as the USDA supply and demand report showed US ending stocks decrease from 4.90 to 4.50 million bales and world ending stocks down from 54 to 52 million tons.

12/4/09 Cotton futures prices were up again this week in spite of the huge rally in the US Dollar on Friday following the upbeat jobs report and the potential for interest rates to be raised.

11/28/09 Cotton futures prices hit their highest prices in 14 months as the weak US Dollar should help demand from foreign buyers and the wet weather in many cotton growing areas is expected to hurt yields and limit supply. Cotton option premiums are high.

11/20/09 Cotton futures prices rallied this week as the harvest is behind the 5 year average and the US Dollar continues to weaken hitting another contract low this week. Cotton prices are still considered undervalued by some analysts as cotton prices are still 50% below their all time highs.

11/13/09 Cotton futures prices rallied to a 13 month high based on weakness in the US Dollar and strength in the commodity markets. The recent USDA report showed US ending stocks of cotton down from 5.40 million bales to 4.90 million bales and world ending stocks down from 56 million bales go 54 million bales.

11/6/09 Cotton futures prices are rallying again and are near the October highs. The weak US Dollar and strength in the other softs markets may be helping prices for cotton.

10/24/09 Cotton futures prices are rallying again as wet weather in the Mississippi Delta region is hindering harvest and the recent low levels of the US Dollar are also helping push prices higher.

10/12/09 Cotton futures prices are rallying this week along with most other commodity markets as the US Dollar approached 12 month lows on rumors that many countries are switching away from the US Dollar as a reserve currency. The recent USDA report showed US ending stocks of cotton decrease from 5.6 to 5.4 million bales and world ending stocks stay the same at 56 million tons.

9/25/09 Cotton futures prices rallied as strong rains in the South East is causing harvest delays. The recent rally in the US Dollar is limiting rallies in the cotton market so far.

9/18/09 Cotton futures prices hit a 5 week high as a forecast for colder temperatures may hurt yields. Also helping prices are the weakening US Dollar and the idea that the global economy may be strengthening.

9/11/09 Cotton futures prices rallied this week based on the sell off in the US Dollar. The USDA estimated for US ending stocks stayed the same at 5.6 million bales and the world ending stocks were reduced from 57 to 56 million tons. Cotton option premiums are high.

9/4/09 Cotton futures prices are selling off. The World Trade Organization ruled that Brazil can impose $295 million of trade sanctions against the US because of illegal cotton subsidies by the US government. Cotton option premiums are high.

8/21/09 Cotton futures prices are selling off this week as the potential global rebound in growth seems to have stalled for now. Cotton prices are near 57 cents per pound in spite of the weaker US Dollar. Cotton option premiums are high.

8/7/09 Cotton futures prices are up this week as the perception of an improving world economy and the weakening US Dollar are helping many commodities run higher. Cotton option premiums are high.

7/31/09 Cotton futures prices rose along with the rest of the commodity sector as the weakening US Dollar and favorable economic reports may signal and end to the recession soon. Recent rains in Texas may help the crop their. Cotton option premiums are high.

7/20/09 Cotton futures prices are still trading sideways in spite of the weakening US Dollar and more positive economic reports such as retail sales and industrial production. Cotton option premiums are high.

7/10/09 Cotton futures prices are trading sideways as the most recent USDA report showed US ending stocks unchanged at 5.60 million bales and world ending stocks up from 57 to 58 million tons. Cotton option premiums are high.

7/4/09 Cotton futures prices were volatile this week from up limit to selling off as lower planted acreage is being offset by the strong US Dollar. The USDA estimate was 9.05 million acres. Cotton option premiums are high.

6/21/09 Cotton futures prices sold off to a 6 week low as wet weather may help some moisture starved parts of the Texas and the US Dollar continued to rally. Cotton option premiums are high.

6/5/09 Cotton futures prices rallied as China sold 65,422 bales at a price of 84 cents per pound. Cotton option premiums are high.

5/30/09 Cotton futures prices have been selling off recently as lower demand from textile mills and high short term supplies are pressuring prices. Also hurting prices was the recent news that China sold two months worth of domestic demand supplies from their reserves. Cotton option premiums are high.

5/22/09 Cotton futures prices are selling off as China recently announced that the government was making cotton reserves available by the end of the month hinting towards less imports to China. Cotton option premiums are high.

5/15/09 Cotton futures prices are still high as the recent USDA report showed US ending stocks down from 6.8 to 5.6 million bales and world ending stocks down from 62 to 58 million bales. Cotton option premiums are high.

5/8/09 Cotton futures prices are still flying higher. Hot dry weather in Texas may hurt the crop and the potential for China's economy to turn up are helping cotton prices run higher. Cotton option premiums are high.

4/30/09 Cotton futures prices are still heading higher. The most recent rally took cotton to a 5 month high. Farmers are unlikely to plant cotton  unless prices move appreciably higher. Cotton option premiums are high.

4/23/09 Cotton futures prices have been on a tear recently and are currently at the 50 cent level. Dry weather and one of the smallest crops in decades is helping push prices higher. Cotton option premiums are high.

4/10/09 Cotton futures prices are rallying to two month highs as the USDA prospective plantings report expects cotton acreage to be the lowest in 25 years. The USDA estimates US ending stocks down from 7.3 to 6.7 million bales. Cotton option premiums are high.

3/27/09 Cotton futures prices are still running based on dry soil conditions before planting in Western Texas. Cotton option premiums are high.

3/20/09 Cotton futures prices rallied this week as inflation may be coming soon following the worst deflationary cycle since the Great Depression may be ending. The recent move by the Fed to print a trillion dollars and then use then to buy treasuries has significantly weakened the US Dollar. Cotton option premiums are high.

3/13/09 Cotton futures prices rallied on the USDA report news that US ending stocks were down 5% to 7.3 million bales and the world ending stocks went up to 62.5 million bales. Cotton option premiums are still high.

3/7/09 Cotton futures prices are selling off this week based on the strong US Dollar and the sell off in the stock market. Cotton option premiums are high.

2/27/09 Cotton futures prices are trading sideways to down this week in spite of excellent sales figures and the high probability that farmers will plant soybeans of corn instead of cotton this year. Cotton option premiums are high.

2/13/09 Cotton futures prices sold off this week as the USDA report showed US ending stocks up form 6.90 to 7.70 million bales and world ending stocks up form 59 to 62 million tons. Also hurting prices is the estimate that cotton consumption is the lowest in 10 years. Cotton option premiums are high.

2/6/09 Cotton futures prices are trending higher since November as cotton acres are expected to decline and futures prices are below the cost of production. Cotton option premiums are high.

1/30/09 Cotton futures prices are still climbing and recently had the highest close in 3 months. This uptrend is still intact based upon expectations that the South American drought in many growing areas will push farmers away from cotton and towards corn and soybeans. The US farmers will probably also follow suit and plant soybeans and corn at the expense of cotton. Chinese cotton production is also expected to fall. Cotton option premiums are high.

1/16/09 Cotton futures prices rallied based on the high soybean prices may drive more farmers away from cotton over to soybeans. US ending stocks were down from 7.1 to 6.9 million bales. Cotton option premiums are high.

1/10/09 Cotton futures prices rallied recently on a short covering rally and the idea that commodity prices may rebound in 2009 based on the lower US Dollar and inflation. Cotton option premiums are high.

12/27/08 Cotton futures prices have been stabilizing near its contract lows as the cost of production is higher than the current price of cotton. Cotton option premiums are high.

12/19/08 Cotton futures prices have been reacting to moves in the US Dollar this week. Weak dollar days yielding strength in cotton prices and strong dollar days yielding weakness in cotton prices.

12/12/08 Cotton futures prices rallied with the rest of the commodity markets this week as the US Dollar fell from its highs. The USDA estimates the US ending stocks up from 6.2 to 7.1 million bales. Cotton option premiums are high.

12/5/08 Cotton futures prices sold off again to contract lows this week as China and India have weakening economies. China and India consume 59% of the world's cotton. The US is sitting on the smallest crop in 20 years. Cotton option premiums are high.

11/30/08 Cotton futures prices are rallying from contract lows with the falling US Dollar. Cotton option premiums are high.

11/21/08 Cotton futures prices are still coming down and are over 10 cents below their loan value. The fact that cotton prices are cheaper than the cost of production may soon find a bottom in prices. Cotton option premiums are high.

11/7/08 Cotton futures prices are still coming down in spite of the tight supplies. The slowing global economy is hurting demand and crude oil prices falling along with the strong US Dollar are not helping either. Cotton option premiums are high.

11/1/08 Cotton futures prices have fallen below the cost of production based on the weakening outlook for the global economy and the strong US Dollar. Liquidation of commodity index funds and falling crude oil prices are also pressuring cotton prices. Cotton option premiums are high.

10/24/08 Cotton future prices are still falling as mills are unwilling to buy for 50 cents or higher and because of the massive deleveraging that is still occurring in the stock and commodity markets. The large repatriation of US Dollars back to the US is causing the dollar to rally to 3 year highs which hurts export demand. Cotton option premiums are high.

10/10/08 Cotton futures prices were down limit after the USDA report on Friday. Demand destruction, perception of a global recession and lower crude oil prices are pressuring prices. The USDA US ending stocks showed an increase from 4.90 to 6.20 million bales and the world ending stocks increased from 52 to 55 million tons. Cotton option premiums are still high.

10/6/08 Cotton futures prices are selling off and are below the 55 cent level, a contract low. Fears of a global recession, the scramble for liquidity and the strong US Dollar are hurting cotton prices. Cotton option premiums are high.

9/25/08 Cotton futures prices are trading sideways. However, at the current demand rate the old crop supplies will be gone in 8 weeks and a tight new crop is expected. Cotton option premiums are high.

9/19/08 Cotton futures prices sold off to a contract low as the rush to liquidity caused by the global financial meltdown is hurting commodities. Cotton option premiums are high.

9/12/08 Cotton futures prices sold off most of the week as the USDA estimated that US ending stocks were at 4.9 million bales up from 4.6 million bales last month. World ending stocks were at 52 million bales up from 51 million bales last month. Cotton has been following crude oil down recently. Cotton option premiums are high.

9/5/08 Cotton futures prices sold off in spite of the huge amounts of rain created by Hurricane Gustav hitting the already soaked cotton fields. The large lack of demand is shown by the lack of exports. Cotton option premiums are high.

8/29/08 Cotton futures prices rallied this week based on the threat of Hurricane Gustav bringing more rain to the Mississippi and Louisiana crops that already have too much moisture. Boll rot is already taking a toll on yields and more rain will only make it worse. Cotton option premiums are high.

8/22/08 Cotton futures prices rallied this week 3 cents based on the sell off in the US Dollar and the run up in crude oil prices. The rally may not hold because exports are down by 35% from a year ago and beneficial rains are helping the cotton crop. The recent rally was more about a lack of selling versus an increase in buying. Cotton option premiums are high.

8/15/08 Cotton futures prices sold off this week in spite of the USDA estimates for the US ending stocks decreasing from 5.30 to 4.60 million bales and the world ending stocks decreasing from 53 to 51 million tons. Cotton option premiums are high.

8/8/08 Cotton futures prices have been in a 10 cent consolidation for a few months now because bearish news is usually being offset by hot dry weather in the cotton areas of west Texas. Cotton option premiums are high.

7/25/08 Cotton futures prices rallied this week as potential flood damage caused by hurricane Dolly may impact the Texas cotton crop yields. Cotton option premiums are high.

7/18/08 Cotton futures prices fell this week in the wake of the broad based commodity sell off led by crude oil. Cotton is holding the 70 cent level and may have bottomed. Cotton option premiums are high.

7/11/08 Cotton futures prices rallied this week based on the USDA estimates for US ending stocks declining from 5.40 to 5.30 million bales and the world ending stocks were decreased from 54 to 53 million bales. Cotton option premiums are high.

7/4/08 Cotton futures prices have been falling this week based on the yield damage estimates for west Texas cotton not being as bad as expected. The rally in the US Dollar late in the week also hurt cotton prices. Cotton option premiums are high.

6/27/08 Cotton futures prices rallied this week as only 30% of the Texas crop is rated good to excellent. Recent rains probably wont help cotton yields very much. Cotton option premiums are high.

6/20/08 Cotton futures prices rallied this week as hot dry weather is hurting the west Texas cotton crop and the USDA reported that cotton conditions are deteriorating. Weather forecasts are calling for potential rain over the weekend in some of the drier areas. Cotton option premiums are high.

6/13/08 Cotton futures prices rallied this week along with the other commodities and because the USDA supply and demand report showed a decrease in cotton ending stocks from 5.6  to 5.4 million bales. Hot dry weather in Texas is also helping cotton futures prices stay up. Cotton option premiums are high.

6/6/08 Cotton future prices rallied this week because of the fall in the US Dollar based on talk that the EU will raise interest rates to fight inflation. Cotton is very dependent upon exports and a strong dollar typically hurts prices. Cotton option premiums are high.

5/30/08 Cotton futures prices are falling again to an 8 month low as the US Dollar continues to strengthen which should damage export demand for cotton. Cotton option premiums are high.

5/23/08 Cotton futures prices are still trading sideways in a tight 3 cent range for the last few weeks. The USDA reports that 49% of the cotton is planted. This is down from the five year average of 59%. The US Commerce Department said that cotton mill use increased in April from the rate of 4.2 to 4.7 million bales. Cotton option premiums are coming down.

5/15/08 Cotton futures prices are range bound this week. Their has been now real news to move cotton futures prices and the US Dollar has begun to weaken a bit. Cotton option premiums are high.

5/9/08 Cotton futures prices have been trading mostly sideways this week. The USDA supply and demand report US ending stocks estimates came in at 5.60 million bales down from 9.90 million bales in 2007-08. Global ending stocks are 56 million bales down from 62 million in 2007-08. Cotton option premiums are high.

5/1/08 Cotton futures prices are still falling based on the strength in the US Dollar. Higher dollar values hurt cotton exports to other countries. Cotton acreage is still at decade lows and any weather events could spur a rally. Cotton option premiums are high.

4/25/08 Cotton futures prices dropped this week in sympathy to the overall commodity market and especially the grains. The strong US Dollar hurts exports because of higher prices for foreign buyers. The sell off in crude oil from the highs also hurts cotton because when crude oil prices are high textile mills use natural fibers like cotton instead of manmade petroleum product fibers like polyester and rayon. Cotton option premiums are high.

4/18/08 Cotton futures prices rallied through 80 cents this week only to be hit by massive profit taking from commodity funds. The USDA is predicting a 13% drop in planted cotton acres this year because of favorable pricing in corn, beans and wheat for farmers. Cotton option premiums are high.

4/11/08 Cotton futures prices rallied this week as Walmart bought 12 million pounds of cotton for earth month t-shirts. Cotton also lost acres to corn and soybeans and had a huge week in export sales of 484,000 bales. Cotton option premiums are still high.

4/4/08 Cotton futures prices are trading sideways this week even as the USDA predicted the cotton acres to be down 13% from a year ago. Cotton futures prices had been on a tear recently but seemed to have gotten ahead of itself. The dry weather in cotton growing portions of the south and  TX may boost prices but for now the cotton market is content with sideways price action. Cotton option premiums are high.

3/28/08 Cotton futures prices were consolidating this week and traders were positioning for the March 31 Prospective plantings report by the USDA. Expectations are that cotton acres will shrink because farmers can make more per acre with soybeans, corn and wheat. Cotton option premiums are high.

3/21/08 Cotton futures prices kept falling this week as Wall Street hedge funds and commodity funds liquidated futures positions to cover margin calls in stocks and to pay back borrowed money. The Bear Stearns issue took the confidence from investors. The Fed's 75 basis point cut surprised investors because a full 100 basis point cut was expected. Cotton option premiums are high.

3/14/08 Cotton futures prices went limit up for a couple of days and then limit down. Now prices are consolidating sideways. In 14 years of trading, I have never seen such volatility. Cotton futures have more price increases to achieve if farmers are to plant it instead of corn, beans and wheat. The new low for the US Dollar may help prices go higher especially if the Federal Reserve Bank cuts rates again. Cotton option premiums are ridiculous and some sideways price movement will be needed to deflate cotton option premiums.

3/7/08 Cotton futures prices went up limit for 4 days in a row only to sell off limit the last 2 days. The short futures price squeeze produced ridiculous option premiums as short futures holders flooded to the options markets to offset losses. Cotton option premiums are outrageous currently.

2/29/08 Cotton futures prices rallied to contact highs this week based on the battle for acreage with beans, corn and wheat. The National Cotton Council predicts that cotton mill use fell from 4.74 to 4.68 million bushels in January. Cotton futures prices have the challenge of rising enough to compete for acreage with other more profitable agricultural products. The potential 50 basis point rate cut expected by the Fed in March is also helping prices rise on inflationary fears. Cotton option premiums are high.

2/22/08 Cotton futures prices rallied this week the highest close in a month because cotton looks cheap to speculators compared to the grains. The USDA planting estimate came out this week and shows cotton acreage down 12% to 9.5 million acres this year. If this estimate is correct, that would be the lowest plantings in 25 years. All time highs for crude oil futures prices also supported the cotton futures market. Cotton option premiums are getting high.

2/15/08 Cotton futures prices were up limit on Thursday of this week based on expectations of very limited acreage being planted this year. The USDA projected cotton production for 2008-9 is expected to be down 9%. The soybean to cotton ratio of 10 to 1 is one way that farmers decide what crop to plant. It is usually 3 to 1 for corn to soybeans. The 10 to 1 ratio would necessitate cotton futures prices going up over a dollar. The soft commodities have definitely outperformed most other commodities this year and still seem undervalued vs. the rest of the commodity market. Cotton option premiums are above average.

2/8/08 Cotton futures prices rallied in sympathy with the grains and because the USDA says that exports are better than expected. Cotton futures prices have been consolidating around 70 cents for the last few weeks. High crude oil prices helps cotton demand because synthetic fibers such as polyester, nylon and rayon are petroleum based and are expensive compared to cotton. Cotton option premiums are above average.

2/1/08 Cotton futures prices are trading sideways this week waiting for next Friday's USDA report. Currently the US cotton planted acreage estimates are near an 18 year low as farmers are paid more to plant corn, beans and wheat at the expense of cotton. Cotton futures prices rallied to $1.17 the last time that global supplies where this low. Cotton option premium is above average.

-T & K Futures and Options Inc.

 

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