Export demand for US styles remain strong

Cotton price activity remained firmly entrenched in its consolidation phase as mill buying and limited merchant buying kept New York futures from succumbing to attempts to push prices lower. Export demand for U.S. styles remained especially strong as additional concerns of crop conditions around the globe heightened.

The ability of the market to hold above the prior lows and settle higher represents a positive sign for upward price movement. The 56 cent -57 cent lows will likely hold and the market is now prepared to look toward 60 cents.

Export sales were very strong. Mexico, Indonesia and Vietnam were major buyers. Much of the current buying by China was for immediate to near term delivery. U.S. prices are some of the lowest in world and the U.S. near record level of cotton inventory available for immediate shipment is well known. While some harvesting in China has begun, it has not progressed to the point of putting pressure on local Chinese prices.