Cotton prices in the US have gained 13 per cent since touching a five and a half year low as the US had been selling more of the fiber overseas. Growers would likely plant more acres with cotton this spring than an industry group had previously projected. US growers are expected to plant 9.7 million acres of cotton this year, down 12 per cent from last year. They will devote more area to soyabean and sorghum.

Cancellations for existing orders outnumbered new sales. It was a turnaround for the US, the world’s largest cotton exporter. A major factor in the slide in net export sales was order cancellations by Turkey totaling nearly 95,000 bales. The world is already struggling with a glut in cotton. Global stockpiles are expected to reach a record 109.84 million bales at the end of the current season.

Since the world is awash in cotton the fundamental direction of the market should be down. At the same time, the demand picture continues to weaken, as China looks set to reduce imports. So the picture is one of plenty of production but limited demand potential. World stocks are equivalent to nearly a year’s worth of consumption.