Unfavorable weather in Texas and a weaker U.S. Dollar are supportive for cotton prices. An earlier rise in cotton prices was interrupted by the dawn of coronavirus implications. U.S. crop conditions reported in Texas and Oklahoma, the largest and third-largest producing states respectively, are declining. Above normal rainfall and above normal temperatures for those two states are impacting by reducing projected crop sizes.

Cotton prices appear to be getting ready to take out July highs. Hurricane Hanna has hurt south Texas cotton producers. In fact, they took what is described as a "devastating hit" from the hurricane. In Virginia, cotton harvesting was helped by recent rain from a tropical storm.

Recent research on cotton uses has led to the development of a cottonseed without dangerous chemistry, opening up a large alternate use of cotton as a source of cattle feed. Increased use of cottonseed to feed humans is also being projected. It would be a high source of protein, but must overcome barriers currently present in standard uses.

Cotton Corporation of India is seeking to boost cotton exorts to Bangladesh and Vietnam. Several million bales may be involved. CCI sold a record 700,000 bales of cotton in one day recently. In general, cotton exports from India have been increasing due to Rupee weakness and an overseas price rise. They have hit a four-year high.

U.S. Senators Thom Tillis (Republican) and Mark Warner (Democrat) wrote a letter to McConnell and Scnumer requesting the next round of coronavirus assistance should address losses felt throughout the cotton supply chain by farmers, textile mills, and merchandisers. Billions of dollars in orders have been cancelled as a result of the virus. Cotton demand in the U.S. has collpased.

A decline of 30 cents in cotton futures prices translates to a loss of $!60 per acre of cotton.

Both the pademic and a recession have cut demand for cotton products. Family farmers face an uncertain future.

Most of a recent rise in cotton prices has been due to a USDA cutting of output forecast and cotton stocks estimates beginning in July. Export sales data has been gaining for all countries. China has amassed a $1 billion glut of U.S. cotton it doesn't need according to Bloomberg. In shorter-term vision, the weather in Texas has been a main prop for recent prices.

The USDA's "World Agricultural Supply and Demand Estimates" report (WASDE) saw few changes to old and new crop balances. It added 200,000 bales of U.S. cotton exports to old crop numbers. Ending stocks for cotton were projected at 7.1 million bales. These changes were helpful to otherwise bearish ending stocks data. Of 12.2 million acres planted in the U.S. for cotton, 16% were abandoned and an average 820 pounds per acre was for the test which would translate to a 17.5 million bale crop in that particular report. One analyst suggest that with a weather premum peak, ICE futures will trade in the upper 50's to mid/upper 60's. This suggests a flat trade, but taken with other news, we think overall news is positive for prices.