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Cotton demand resurfaces in the US

Mill on-call sales have increased almost every week during the 2017-18 marketing year, an excellent indication of improving demand. Cotton demand has resurfaced. Next year, cotton growers across the US will hold on to most of their 2017 plantings.

US cotton is the most competitive in the world. With futures between 67 and 72 cents mills will continue to flock to the US for cotton. US cooperatives and merchants have been aggressively offering strong basis bids to potential mills and that has encouraged excellent sales.

Driven by consumer preferences, and the rapid increase in polyester prices due to massive worldwide pollution issues, cotton has become much more price competitive versus polyester and other plastic fibers. Presently cotton appears to be the better alternative in 2018 for the Midsouth and the Southeast regions. Cotton will again be the only alternative for Texas and Oklahoma.

A slightly bullish scenario now exists for cotton, but any movement above 71 cents will be difficult. While the US crop was judged higher, as was US carryover, the more important decline in world stocks led the market higher. Some still feel that a trip to the very low 60s is imminent as growers could become more aggressive sellers as the end of the year looms.

 
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