Cotton futures have been mostly sideways this week since old crop prices hit new contract lows on Monday. March cotton was trading about 30 points lower by the afternoon on Wednesday, hovering around 63.40 cents a pound. Prices are currently trading below a congestion point centered around 64.45, which could limit gains.

The market still has plenty of work before it reverses its strong bearish trend. Prices have consistently posted lower highs and lower lows for much of the past year.

The USDA’s weekly export sales report showed that cotton sales backed off from their recent marketing-year high. Volumes were reported at 218,700 bales during the week ending Jan. 22, falling back below the five-year average. Total exports and commitments rose to 7.55 million bales, still sitting 13 percent lower than a year ago.

Higher demand from India and Vietnam helped offset some of the yearly declines, with exports nearly double compared to last season. However, the lack of demand from China continued to weigh on overall export sales this season.

End users are likely finding a bargain at current prices. However, there continues to be reduced commercial activity that has kept futures rangebound. Sideways trade is likely to continue through the winter months.
—

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.