After a wild ride in the past year, cotton markets are relatively subdued and price forecasts are weakening. "I think the cotton market is in trouble," says Robin Rosenberg, market analyst at PFGBest, Northbrook, Ill.
Is the trouble big enough to push prices down to the 70¢ range?
"I think we have to see 90¢ first," Rosenberg says. "I think $1 is becoming a real strong pivotal point now."
Cotton on the ICE Futures U.S. exchange in New York soared to more than $2 per pound in February and March but plunged to $1 per pound by summer and chopped near that level since then. Meanwhile, drought in the Southwest slashed the estimated Texas cotton crop by half from 2010, to 3.85 million bales. Oklahoma’s harvest dropped by three-fourths to 105 million bales, according to USDA’s November Crop Production report.
However, growers increased production in all of the 15 other upland cotton states in USDA’s report. The total upland crop of 15.56 million bales is off nearly 12% from 2010’s crop. The American Pima crop is up 46% and the total harvest is down 10%.