DENVER, CO – Over the past week, U.S. cotton prices have soared to the life of contract highs amid increasing global demand, a general reopening of the economy, and production challenges in key growing areas.
According to CoBank, Chinese demand continued throughout the second quarter (Q2-2021) following strong purchases earlier in the marketing year.
China remains a top destination for U.S. cotton as accumulated exports are well above 50 percent year over year.
One month ago, China began its latest round of sales for its state reserve with an announcement of 2.75 million bales available for auction through the end of September, though this represents cotton in reserve from 2011-2013.
Concerns remain, however, due to global shipping delays and logistical disruptions that have delayed some export purchases.
With Australia capping off a major rebound in production last season, 2.8 million bales compared to just 600,000 in 2020, China and Southeast Asian markets have been finding those supplies more accessible during the COVID-19 pandemic.
Currently, the U.S. is expecting a good crop this season – especially in West Texas – where early-season rainfall boosted the potential of the dryland crop, as USDA continues to project an 18.8 million bale crop this fall.
(SOURCE: All Ag News)