Conjecture about higher amounts of cotton planting in the U.S. – the world's largest exporter – sent the price of the soft commodity down, Bloomberg reports.
Prices for the soft fiber dipped for the first time in six trading sessions, amidst conjecture that the recent price surge in cotton futures would end up causing a reduction of demand. The southwest U.S. might see, at a minimum, a 10 percent increase in terrain devoted for cotton growing, according to an economics professor at Texas A&M University.
"Current higher prices may slow purchases by overseas importers and encourage U.S. farmers to increase crop acreage," Hiroyuki Kikuwawa, general manager of research at IDO Securities Co. in Tokyo, told Bloomberg.
Prior to Wednesday, cotton prices slipped nearly five percent since last month's record price. On Tuesday, the price of cotton was $1.4597, the highest value since early November. During the five trading sessions, cotton's price increased 11 percent.
"The trend is still up," Keith Brown, president of a Georgia brokerage, told Bloomberg. "Until we either see a collapse of demand or a huge infusion of new supply, we’re going to stay volatile and bullishly slanted."
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