Turkey and Vietnam are two of the biggest buyers of US cotton. The importance of China as a shipping destination has slipped, but China will continue to rank in the top five US customers.

China will continue to require high qualities from the US to mix with their local cotton in an attempt to produce a marketable yarn. Adding to that need is the ongoing weather problem facing the Chinese 2015 crop that has created yield and quality losses – making the Chinese depend on the US.

To date, the US has harvested some 5,00,000 bales of high quality cotton, and about 3,50,000 bales of this have been sold. The real troublesome note for the market has been that it has not been able to hold any daily highs, even with prices so near the contract lows. While not truly challenging contract lows, far too much trading has occurred near the lows, as if there is not any upside potential for cotton.

There is a very thin level of overhead price resistance. Cotton remains seven to ten cents underpriced. Hand-to-mouth buying has served the mills well for two years. World production of cotton faces a cut of a much as three million before the year is completed.