Cotton futures were dropping in value on Monday, resuming a downward trend from last week that is seeing the soft fiber drive toward its lowest price in 14 days, according to published reports.
ForexPros reports the price drop is partially attributable to reduced global demand. The U.S. Department of Agriculture reduced the outlook for global cotton demand by 2.6 percent as compared to figures from November, which was 114.27 million bales. Newly released figures amount to 111.34 million bales for the marketing season ending July 31.
Adjustments indicate "continued weak mill demand owing to an uncertain world economic outlook," according to the Agriculture Department as cited by ForexPros. The change also reflects a "shift by clothing makers to more polyester" following the upward drive of the price of cotton futures earlier this year.
At 1:48 p.m. on Monday, cotton futures fell 3.3 percent, a 2.98 cent slip to 87.45 cents per pound.
Established on March 7, the record price for cotton futures is $2.197 per pound.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.