Cotton Hits Monthly High as Market Sees Demand Pickup From China
Comment of the Day

July 11 2023

Commentary by Eoin Treacy

Cotton Hits Monthly High as Market Sees Demand Pickup From China

This article from Bloomberg may be of interest. Here is a section: 

The US Department of Agriculture will release new numbers for the US and world cotton production on Wednesday. Analysts in a Bloomberg survey expect little change versus the report from the prior month, which already pointed to growing world cotton consumption. 

On the supply side, the cotton futures market is concerned about the condition of the US crop and the yield potential for the new marketing year, said Walter Kunisch, senior commodity market strategist at Hilltop Securities Inc. Heat in US top producer Texas creates challenges for the crop development, he said. 

In other markets, raw sugar gained following the release of data on the declining quality for sugar-cane crops in top exporter Brazil. Arabica coffee fell, narrowing its premium over robusta as the pace of Brazil’s harvest increases and El Niño threatens Vietnam’s production of the cheaper beans.    

Eoin Treacy's view

The big surprise for my family, in driving the 1100 miles to Phoenix and home again to Dallas, was how green the desert is. When we first completed that drive in May 2021, during our migration out of California, the landscape was barren. The California and Texas droughts had leeched moisture from the landscape. This time, the topography was much more appealing despite high temperatures. 

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