What Market Fundamentals Can Affect The Cotton Futures?
Seasonally, the highest prices for cotton futures normally occur between March and July. The lowest prices typically occur between September and November. When you are considering a trade in the cotton #2 market some of the basic fundamentals that you should consider are: 1. The relative price of competing crops. Farmers are going to plant what they feel will offer them the best return on their investment. If soybean prices are high, and cotton prices are low, they will plant more soybeans, and vice versa. Therefore, by looking at the relative price of competing crops you can attempt to estimate prospective plantings acreage which will affect supply. 2. The relative price of synthetic fibers that are petroleum based. Textile manufactures are going to use fibers that will offer them the best return on their investment. If synthetic fiber prices (polyester, rayon, or nylon) are high compared to natural fibers (cotton) they will use more cotton, and vice versa. Therefore, by looking at th
